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“After a period of rapid expansion, industrial customers are now optimizing their supply chains. Companies are inventorying their assets, identifying excess capacity, and investing in automation where it drives profitability.”
- Matt Mullarkey, CenterPoint's SVP, Strageic Projects & Planning
Industrial real estate pivots from speed to precision, prioritizing power, automation and regional supply chain strategies.
NAIOP’s Development Magazine featured CenterPoint’s SVP of Strategic Planning, Matt Mullarkey, and SVP of East Region Development, Ronel Borner, in its spring 2026 issue about the transition in industrial development from speed to market to designing facilities to meet precise customer facility specifications, and more.
Read what they had to say along with Colliers’ National Director of Industrial Services, Stephanie Rodriguez, Kurv Industrial’s East Region Partner, Andrew Hurwitz, and SVP, of Investments, Stefan Sansone, Jack Fraker, President and Global head of Industrial and Logistics Capital Markets for Newmark, and DLA Piper Partners, Primo A.J. Fontana, and Lauren A. Rico, in the feature article, “The Industrial Real Estate Reset.”
As the industrial sector’s unprecedented two-plus-year supply surge from 2022 to 2024 grows ever more distant, developers are confronting a market that no longer rewards speed alone. Today’s industrial landscape demands a much different calculus.
Given that new reality, developers are increasingly weighing electrical power availability against automation specifications, evaluating nearshoring corridors alongside energy infrastructure, and balancing sustainability mandates with construction costs.
CBRE reported that industrial leasing remained solid in the third quarter of 2025 as occupiers upgraded facilities, renewed expiring leases and continued outsourcing to third-party logistics providers (3PLs). Strong leasing combined with less new construction held the national vacancy rate at 6.6%, reversing a string of quarterly increases. Year-to-date leasing rose 9.8% to 682 million square feet, led by 3PL demand, while net absorption of 53.3 million square feet in the third quarter pushed the year-to-date total to 79 million square feet. Construction completions continued to outpace absorption, with space under construction rising to 226.9 million square feet.
These metrics point to a market in transition — not contraction. CBRE data shows U.S. net lease investment surged roughly 24% in the third quarter of 2025 to $48.1 billion, with industrial leading that category, underscoring continued investor interest despite broader market uncertainties.
“During and immediately after the COVID-19 pandemic, the industrial sector operated with a mindset focused on sheer construction volume, responding to unprecedented demand for space,” said Stephanie Rodriguez, national director of industrial services at Colliers. “Between mid-2022 and mid-2024, more than 100 million square feet of new supply was delivered each quarter for nine consecutive quarters.”
Since then, development has slowed significantly, she added, falling below pre-pandemic levels. The third quarter of 2025 saw just 65 million square feet of new supply, the lowest total since the first quarter of 2019.
“Today, construction is increasingly defined not by quantity but by quality, utility and operational readiness,” Rodriguez said. “Modern industrial buildings are designed to meet complex tenant requirements, including heavy and reliable power, automation compatibility, and integrated data infrastructure to support smart warehouse operations.”
When the industrial market was having a major upswing, developers were primarily focused on speed and volume, pushing to deliver as much product as possible to keep pace with extraordinary leasing velocity, according to Stefan Sansone, senior vice president of investments for Chicago-based Kurv [formerly Bridge] Industrial.
“Now that activity has stabilized, developers are taking a more selective approach,” Sansone said. “The emphasis has shifted toward high-quality locations, stronger access and more efficient site design. Thoughtful execution matters just as much as speed.”
During the pandemic building boom, some developers might have been tempted to compromise on functionality and site plans to deliver buildings as quickly as possible, said Ronel Borner, senior vice president, development, CenterPoint Properties, a developer of industrial real estate near Chicago’s logistics hubs.
“Now, the flight to quality includes not just a product but product that is well designed,” Borner said. “At CenterPoint, we’ve always made sure we’ve designed buildings that are not only in grade A locations but also have Class A designs. We build and invest for the long term.”
Another strong force in the new industrial cycle is what Rodriguez called “supply chain restructuring,” with industrial occupiers shifting away from a single-hub distribution model to a more regionalized approach.
“This shift shortens lead times and reduces disruption risk,” Rodriguez said. “The adjustment is resulting in additional demand, particularly for midsize facilities that range from 100,000 to 400,000 square feet [and] larger primary distribution and fulfillment centers with 500,000-plus-square-foot requirements.”
“After a period of rapid expansion, industrial customers are now optimizing their supply chains,” noted Matt Mullarkey, senior vice president, strategic planning and projects, CenterPoint Properties. “Companies are inventorying their assets, identifying excess capacity and investing in automation where it drives profitability.”
This restructuring is happening against a backdrop of reshoring and nearshoring, which are shifting production closer to the end market to shorten supply chains. Nearshoring to Mexico is meaningfully shifting freight flows and industrial demand toward border markets such as Laredo and El Paso, Texas, and into inland logistics corridors such as Dallas-Fort Worth, Kansas City and Chicago.
On the reshoring side, the CHIPS and Science Act continues to drive a wave of advanced manufacturing. The federal statute, enacted in 2022, includes nearly $53 billion in incentives for U.S. semiconductor manufacturing and a tax credit worth 25% of qualifying investments in advanced manufacturing facilities, often measured in the tens of billions of dollars per site. Manufacturing construction spending in the U.S. has more than doubled compared with pre-pandemic levels.
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