Industrial Insights - December 2025
Prologis 2026 Bold Predictions
Prologis has provided industry visibility that allows analysis of broader industrial real estate trends for the coming year.
Action Plan for 2026/2027 Leases
The industrial real estate market is currently in its cyclical trough, offering tenants advantageous leasing conditions. Justin Smith recommends that companies with 2026/2027 lease expirations should "work your renewals early and often" to capitalize on favorable economics before the market recovers.
Large institutional landlords have shifted strategy from holding rental rates to prioritizing occupancy through market-rate negotiations. Smith predicts this approach will reverse within the next year, with rates and reduced concessions following historical patterns of rapid recovery once competition for space intensifies.
The letter emphasizes understanding property value, occupancy impact on landlord portfolios, and supply chain implications. Smith's firm has assembled specialists throughout 2025—operations consultants, supply chain designers, transportation optimization experts, and industrial engineers—to help clients evaluate whether reinvestment in current properties or "right-sizing" into new facilities better serves their long-term strategy.
2025 Predictions Review
Last year's bold predictions largely materialized:
- Bulk space rebalancing occurred in Q3 2025
- Construction remained quiet with declining land values - Freight market consolidation continued with bankruptcies and realistic valuation discovery - Ports and global trade strengthened, with GDP growth reaching approximately 2.1% despite economic volatility
Podcast Series
Eight episodes featuring industry leaders covering topics from 3PL operations to supply chain strategy and warehouse optimization.
Closing
Smith thanks readers for engagement and extends holiday wishes to the community.