JULY 2026 LOGISTICS REAL ESTATE 21 Superior Service. Tailored Solutions. Higher Standards. Learn More 630-786-2424 1211 W. 22nd St, Suite 529, Oak Brook, IL 60523 www.coreindrealty.com for 64% or 113 million sq/ft of the net absorption. And as Matthieu writes, “Big-Box leasing activity, historically a leading indicator for broader market trends, is picking up.” There are a number of reasons the logistics companies are looking for newer and bigger facilities. One of the main reasons is fairly simple, many of the warehouses are effec- tively obsolete and can’t efficiently or expeditiously handle the volumes of the supply chain. And size is one of the best com- mercial attributes for handling the dis- ruptions in the supply chain. Being lean is desirable when conditions are stable. But flexibility is the key to keeping a supply chain functioning during times of disruption. In a market environment featuring unpredictable uneven cargo flows, size helps smooth the peaks and troughs — especially when coupled with up-to-date warehousing features. As Matthieu’s report points out there is a clear need for updated ware- houses: “Modern tenant needs are materially different from much of the existing industrial inventory nation- ally, with 65% of square footage built prior to 2000 and 88% built prior to 2010. Nearly 10% is approaching or exceeds 50 years in age…These older assets typically lack features in demand by tenants, including suf- ficient clear heights, dock door den- sity, ESFR sprinkler systems, ample truck courts, and layouts capable of supporting automation and robotics. For example, they often have clear heights below 24 feet versus 32–40+ feet expected in modern facilities and significantly lower dock door ratios.” Quality the Drawing Card This desire for modern warehous- ing has been described as a “flight to quality”. But quality doesn’t come cheap. Jason Price, Americas Head of Logistics & Industrial Research at Cushman & Wakefield explained, “With occupancy tightening and new supply limited, tenants are getting more strategic about both location and design,” Adding, “We’re seeing a strong focus on efficiency, total occupancy cost, and long-term oper- ational performance.” And there are some strong indi- cators that the rebound is already underway. JLL (Jones Lang Lasalle), one of the world’s largest commercial real estate companies reported, “The [California] Inland Empire recorded exceptional leasing activity in Q2 2026, with 15.5 million sq/ft of new leases signed -the market’s strongest quarter on record. June alone accounted for 7.5 million sq/ft, underscoring the concentration of demand late in the quarter. Total gross absorption reached 13.0 million sq/ft in Q2, bringing the 2026 YTD total to 22.6 million sq/ft, another record-break- ing period for the market. Activity was anchored by mega-box demand from third-party logistics (3PL), retail and consumer goods operators, with several transactions exceeding 400,000 sq/ft. And JLL in their assessment of the results wrote, “In a market that has historically displayed a top-down recovery, the return of strong leasing activity from bellwether retail and con- sumer goods occupiers is an encourag- ing signal for the broader market and points to sustained demand over the coming quarters. Coupled with con- tinued strong demand from Asian 3PL operators, logistics and distribution users, gross absorption is expected to remain elevated. Notably, 2026 YTD net absorption has outpaced construc- tion deliveries for the first time in four years, marking an inflection point in supply-demand dynamics that should support continued fundamental tight- ening through year-end.” Headwinds to Warehouse Construction? While the warehousing recovery is already under way in some key regions in the US, there still are some headwinds influencing the market. The same geo-political and economic factors, such as tariffs, energy costs and conflicts, which contribute to supply chain disruptions, also influ- ence construction decision-making. It is a question of whether the rents or usage is worth the consider- able investment that building a qual- ity 500,000 sq/ft Big-Box facility will cost? And it isn’t just the building’s worth today but also into the future. As Clarion’s report explains of the ‘build or not to build’ dilemma, “Development decisions are driven by forward-looking rent and yield-on-cost expectations, which can act as a lim- iting factor when current rents do not Maersk announced the opening of a new fulfillment hub in Hopedale, MA. (BOOM – continued on page 23) (BOOM – continued from page 18)
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