Industrial & Logistics
Last-mile fulfillment and distribution assets leased to tier-one logistics operators with secular growth tailwinds.
Average Cap Rate
5.45%
+0.28%
Vacancy Rate
3.8%
-0.4%
Avg Rent (per SF/year)
$9.00
+2.1%
Rent Growth YoY
4.8%
+0.9%
Leasing Velocity
2.3 Mo
-0.5 Mo
Supply Absorption
92.3%
+1.8%
Data as of Q4 2025 · Sources: CoStar, CBRE Research, Moody's Analytics
Market Overview
The industrial and logistics sector has emerged as one of the most compelling investment opportunities in commercial real estate, driven by structural tailwinds from e-commerce adoption and supply chain reconfiguration. Properties leased to FedEx, Amazon, DHL, and other tier-one logistics providers offer exposure to essential infrastructure supporting the modern supply chain. These facilities—ranging from large fulfillment centers to last-mile distribution hubs—benefit from consistent demand and limited new supply constraints in prime markets. Tenants in this space maintain investment-grade or near-investment-grade credit ratings and demonstrate financial resilience through multiple economic cycles. The sector's characteristics include long lease terms (10-15 years), creditworthy operators, and favorable rent escalation provisions. Current cap rates of 5.25% to 5.85% reflect both the quality of tenants and the attractive risk-adjusted returns investors are seeking in this critical infrastructure asset class.
Top Tenants by Portfolio Size
| Tenant | Credit Rating | Lease Type | Units |
|---|---|---|---|
| FedEx | BBB | NNN | 2,847 |
| Amazon Logistics | BBB+ | NNN | 4,156 |
| DHL Supply Chain | BBB- | NNN | 1,924 |
| XPO Logistics | BB+ | NNN | 1,253 |
Recent Market Deals
| Tenant | Location | Cap Rate | Price | Square Feet |
|---|---|---|---|---|
| Amazon | Indianapolis, IN | 5.25% | $45,800,000 | 850,000 |
| FedEx Distribution | Memphis, TN | 5.65% | $38,250,000 | 680,000 |
| DHL Logistics | Atlanta, GA | 5.40% | $42,100,000 | 750,000 |
| XPO Facility | Chicago, IL | 5.85% | $28,950,000 | 520,000 |
Market Outlook
The industrial logistics market outlook remains exceptionally positive through 2026 and beyond. E-commerce penetration continues to expand, necessitating additional distribution capacity and fulfillment infrastructure. Urban and suburban markets near population centers are experiencing sustained rental growth of 4-6% annually, with supply constraints in prime locations limiting new competitive development. Major logistics operators like Amazon are actively consolidating their real estate footprints and securing long-term occupancy agreements, providing stable lease revenue. Capital availability for industrial assets remains robust, with institutional investors and REITs competing aggressively for core holdings. However, select secondary markets are experiencing oversupply in certain warehouse sectors. Investors should prioritize properties with strong tenant credit profiles, located in supply-constrained markets with favorable demographics, and featuring modern specifications suitable for contemporary logistics operations.
Key Investor Tips
Focus on supply-constrained markets with limited developable land where tenant occupancy costs are justified by operational efficiency and delivery speed requirements.
Seek properties leased to tier-one operators (Amazon, FedEx, DHL) with BBB- or better credit ratings, as these tenants drive sector fundamentals and maintain robust financial profiles.
Evaluate lease structures for CPI escalations or fixed annual increases of 2.5%+; logistics rent growth typically outpaces inflation, providing strong total return potential.
Consider the property's technological compatibility with modern logistics standards (ceiling height, column spacing, loading capacity) as these features justify premium rents and support renewal viability.
Monitor supply metrics in target markets; properties in markets with absorption rates below 5% vacancy and positive net absorption (>2 million SF annually) offer superior appreciation potential.
Assess tenant expansion plans and whether the property is strategically positioned for long-term renewal at higher rates as supply tightens and alternatives become scarcer.
Data and analysis on this page are for informational purposes only and do not constitute investment, financial, or tax advice. Statistics may be estimated from publicly available sources and should be verified with primary data providers before use in investment decisions. Tenant information is sourced from public filings and may not reflect current conditions. Past performance does not guarantee future results.