Automation Drives Industrial Property Demand

Automation Drives Industrial Property Demand

U.S. industrial property demand accelerated in the second half of 2025, a trend expected to extend into 2026 as companies seek modern facilities capable of supporting artificial intelligence and advanced automation, according to brokerage Cushman & Wakefield.

Newer warehouse and logistics properties are leading the resurgence, consistently outperforming older, less functional assets. “Last quarter, demand was driven by modern facilities as occupiers prioritized automation-ready buildings with greater power capacity,” said Jason Price, Cushman’s senior director and Americas head of logistics and industrial research, in a recent report.

Large industrial users played a significant role in the upswing. Tenants occupying 500,000 square feet or more accounted for more than 116 million square feet of leasing activity nationwide in 2025. These firms increasingly favor newly built, customized facilities over older properties that often require costly upgrades to meet modern technology and power standards.

Cushman & Wakefield also reported that six U.S. regions posted more than 10 million square feet of positive net absorption in the fourth quarter, meaning more space was occupied than vacated. Dallas and Indianapolis led the gains, and all six regions exceeded absorption levels from a year earlier. At the same time, completions of new industrial space declined 35% year over year as construction slowed, helping to support rent growth and limit vacancy increases.

“Occupiers are re-entering the market with a clear focus on long-term network efficiency, automation, and resilience,” said Jason Tolliver, Cushman’s president of logistics and industrial services. “That shift is driving strong performance in modern, power-capable assets, particularly in markets tied to domestic consumption and manufacturing investment.”