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Industrial Lease Expirations Set Stage for Flight to Quality
With more than 1.7 billion square feet of industrial leases set to expire within the next 36 months, the stage is set for increased demand for higher-quality space, according to a recent survey of industrial occupiers by CBRE Research.
CBRE’s 2026 U.S. Industrial & Logistics Occupier Survey found that more than 90% of occupiers plan to maintain or expand their portfolios in the next 36 months, motivated by a need for newer space (23%) or lower costs (17%). This represents a continued shift away from older assets, which have recorded more than 400 million square feet of negative net absorption in the past three years.
CBRE says owners of pre-2020 buildings may need to offer more concessions to secure tenants, mainly because they are increasingly locating in more modern, functionally efficient facilities.
“The increased volume of lease expirations will give occupiers a meaningful opportunity to reassess and reposition their portfolios,” said John Morris, president of Americas Industrial & Logistics for CBRE. “This shows a reset in industrial leasing, and we expect to see a continued flight to quality as companies look for modern buildings that reduce operating costs and improve supply chain efficiency.”
Pictured: Dermody’s The Logistics Campus, a master-planned 10-building campus under development in Glenview, IL.
- ◦Lease
- ◦Development
