Warehouse Development Bottoms Out After Three-Year Decline
The U.S. warehouse market appears to have hit its low point, with construction activity showing signs of recovery after a steep three-year decline. Market intelligence firm Interact Analysis reports that only 585 warehouses entered the building stock in 2025—the market's floor after dropping from a peak of 2,784 facilities in 2022.
Senior analyst Matthieu Kulezak writes that the market is "slowly recovering" as economic uncertainty eases and e-commerce demand remains steady. Projects delayed in late 2024 and 2025 are expected to return to the pipeline this year, providing a modest uptick in construction activity.
But 3PL operators shouldn't expect a construction boom anytime soon. Kulezak notes that building costs remain at record highs and financing is still tight—two factors that will constrain development through the near term. The firm doesn't anticipate construction returning to pre-pandemic levels until 2028.
There's another headwind: speculative developers have shifted their focus from distribution centers to data centers, pulling capital away from warehouse projects just as the logistics sector begins to stabilize.
The recovery also faces external threats. "Renewed trade tensions between the U.S. and China could quickly reverse recent gains," Kulezak warns, "reigniting uncertainty and delaying investment decisions once again." For 3PLs evaluating expansion plans or lease renewals, that means the next few years will require careful timing and flexibility as the market finds its footing.
