Warehouse leasers seek cheaper properties away from ports

Companies leasing industrial real estate for logistics use are increasingly moving large-scale distribution activity away from coastal port markets and toward lower-cost inland logistics hubs, according to a report from Cushman & Wakefield. Under that pressure, “port-proximate” industrial markets captured just 19% of total U.S. industrial net absorption in 2025, the lowest share recorded in the past 15 years. And meanwhile, demand across the broader U.S. industrial market strengthened, with national net absorption rising 16.3% year over year, the firm said in “North America Ports & Trade Update: 2025 in Review.” Three reasons for the change include tariffs, nearshoring, and evolving supply-chain strategies, which are combining to shift global trade patterns and cost pressures. Despite that ongoing geopolitical uncertainty and tariff volatility, cargo volumes at the 10 largest U.S. maritime ports declined just 0.3% in 2025, underscoring the resilience of U.S. trade flows even as supply chains continue to adjust. Another reason for the shift is rising costs in coastal logistics markets. Industrial rents in port markets climbed 65% between 2019 and 2023 and remain 33% higher than the national average, encouraging many occupiers—particularly those requiring facilities larger than 500,000 square feet—to pursue more cost-effective inland locations. As a result, port markets recorded only 2% growth in industrial demand in 2025, compared with 21% growth across inland markets, reflecting a broader reconfiguration of supply-chain networks. “Industrial occupiers are redesigning logistics networks around cost, resilience, and flexibility,” Jason Price, Americas Head of Logistics & Industrial Research at Cushman & Wakefield, said in a release. “Port proximity remains important for speed-to-market and cross-dock functions, but large-scale distribution activity is increasingly shifting inland where occupiers can access lower costs, more land, and modern facilities.” Looking ahead, Cushman & Wakefield expects industrial demand across many port markets to stabilize as development pipelines shrink and supply-chain strategies continue to evolve. “Port markets remain strategically important, but investors and occupiers are becoming far more selective,” said Price. “Building quality, infrastructure access, and proximity to population centers increasingly matter more than simply being located near a port.”