When Prologis talks, the logistics world listens. With visibility into thousands of facilities across global markets their analysis is a working blueprint for how occupiers will need to adapt.
The short version: Vacancy is tightening where you want to be, utilization is rising, trucking is getting more expensive, power is the new gating factor, and specialized demand (e-commerce, manufacturing, defense) is quietly rewriting what “prime” industrial really means.
If you’re a large corporate tenant with a national or global footprint, this isn’t background noise. It’s a direct signal to reassess where you’re located, how much space you’re holding, and what kind of buildings you’ll need next.
1. Utilization Is Rising: Slack in the System Is Disappearing
Prologis’ analysis shows U.S. warehouse utilization is climbing but still below the expansionary threshold of 85.5%. The move upward in 2025 has been led by essential goods, e-commerce, and manufacturing users, with wholesalers and manufacturers frontloading inventory earlier in the year and retailers following heading into the holidays.
If the current pace continues, Prologis projects customers will hit functional capacity in 2026. Historically, this pattern has preceded sharp tightening: utilization rebounded quickly in 2014–2015 and 2021–2022 after periods of elevated vacancy and “logistics slack.”
Translation for occupiers: the window where you can “take your time” on new site decisions is closing.
What tenants should take from this:
- If you’re running hot on utilization today, assume you’ll be competing for space in 12–18 months — not browsing.
- If you’ve been using “excess” locations as a buffer, that slack may become more expensive to replace later.
- This is a good time to audit your portfolio: which sites are truly strategic, which are legacy, and where will you need expansion rights or options?
2. E-Commerce Is Still the Quiet Dominant Force in Leasing
Prologis expects e-commerce companies to account for nearly 25% of new leasing in 2026, as the proportion of goods sold online approaches about 20% globally. And this isn’t just Amazon in big U.S. metros anymore.
Key dynamics Prologis highlights:
- Global online penetration is expected to reach ~19.7% by 2026.
- Asian e-commerce players that entered the U.S. via direct leases and 3PLs are now expanding into Europe and Latin America for cross-border fulfillment.
- In India, platforms like Flipkart and Walmart are adding capacity to serve domestic and export demand.
- De minimis rule changes in the U.S. are pushing e-commerce companies toward blended strategies: onshore inventory, sea-cargo cross-docking, and faster regional fulfillment to manage duties and cross-border complexity.
Why this matters for large occupiers:
You don’t have to be an e-commerce brand to feel the impact. When 25% of new leasing is driven by one use case, that cohort sets the bar for location, speed, and building specs:
- Expect continued competition for close-in, high-throughput facilities in major consumption zones.
- E-commerce demand raises expectations for clear heights, loading ratios, parking, automation readiness, and power — and landlords will price accordingly.
- If your business model depends on slower decision cycles than e-commerce players, you’ll need better data and earlier internal approvals to avoid being outmaneuvered.
3. U.S. Gateways Are Back in Favor (on New Terms)
During the pandemic, coastal gateway markets like the Inland Empire and New Jersey saw rents spike far ahead of the rest of the U.S. That gap has since narrowed. Prologis notes:
- Rent premiums that “blew out” during the pandemic have compressed back toward pre-pandemic spreads.
- As networks evolve to manage both cost and service, coastal and near-port markets are poised for a demand recovery, with:
- Access to dense population centers
- Better availability of modern Class A stock
- Rents that have “reset” to more sustainable, though still premium, levels
Why this matters for your network design:
- If you pulled back from coastal markets purely on cost, it may be time to re-run the math. Transportation is getting more expensive (more on that below), which shifts the value back toward well-located, rent-pricier facilities.
- The price-to-value ratio for gateway locations looks more attractive than it did at the 2021–2022 peak.
- Corporate tenants that move early can secure modern buildings in strategic positions while there’s still some optionality.
4. Power Is the New Location Filter
Location used to mean proximity to ports, highways, labor, and rooftops. In 2026, power availability joins that list as a top-three factor in site selection, according to Prologis.
Several pressure points they highlight:
- In Europe, new development is constrained by grid connection delays and capacity caps, driving interest in micro-grid and on-site solutions.
- In Mexico’s manufacturing-heavy markets, lack of power is already the top constraint for new tenants; transformer utilization in major hubs exceeds recommended levels.
- In the San Francisco Bay Area, Prologis estimates only around 2% of 110/230 kV substations that can serve industrial/logistics users have available firm capacity.
- Fully automated facilities can use 3–5x more power than a 2024 baseline.
What tenants need to change in their approach:
- Stop treating power as a checkbox and start treating it as a core underwriting variable. It should sit alongside rent, TI, and transportation in your internal models.
- Ask for detailed utility profiles during site selection: existing capacity, potential upgrades, timing, and cost — not just “power: yes.”
- If automation, advanced manufacturing, or dense robotics are on your roadmap, you’ll need ahead-of-curve power planning, not “we’ll deal with that in phase two.”
5. Defense and Advanced Manufacturing Are Soaking Up Specialized Space
Prologis expects defense-related demand in the U.S. and Europe to create a new class of specialized logistics and industrial assets:
- European countries are signaling plans to increase defense spending to about 5% of GDP, up from an average of 2.5% in 2024.
- Spending and activity are clustering in strategic industrial corridors across Germany, France, Italy, the UK, the Netherlands, and Poland.
- In the U.S., elevated DoD spending supports steady demand, but what’s changing is the diffusion of work: more small and midsize suppliers entering the market and leasing industrial space for localized, secure, and often power-intensive operations.
- Many of these users are targeting older, well-located product that happens to feature strong power and heavy manufacturing specs built during prior industrial booms.
Why non-defense tenants should care:
- You may find yourself competing for the same high-spec, high-power, well-located assets, even if you’re not in aerospace or defense.
- Older buildings with strong bones and robust utilities are being re-rated upward, especially in legacy industrial corridors.
- If you rely on similar specs — heavy utilities, secure operations, specialized floor loads — you can’t assume legacy space will remain “discount” forever.
6. Trucking Capacity Is Shrinking — and Freight Costs Are Rising
If you build your network assuming transportation capacity will be there at the right price, 2026 may test that assumption. Prologis points to:
- A shrinking pool of U.S. truckers as the freight recession drags on and new regulations (including English language requirements) push some drivers out.
- Smaller carriers under stress, with active carrier authorities 12% below their 2022 peak.
- National tender rejections up over 100 basis points vs. 2024, foreshadowing tighter conditions and higher rates.
- Spot rates up 4% compared with the 2024 average, with further increases expected into 2026.
- Freight costs up 3.5% in 2025, with Prologis expecting double-digit rate hikes in 2026.
Their conclusion: transportation will take an even larger share of total supply chain spend, and well-located logistics real estate becomes a hedge against those rising costs.
The strategic takeaway for occupiers
- Your total cost of occupancy must now explicitly integrate transport cost trajectories, not just today’s rates.
- Facilities that shorten last-mile or middle-mile routes, reduce empty miles, or enable mode-shifting (e.g., to rail or port drayage) will justify higher rent — and still be cheaper on a total landed cost basis.
- Network optimization isn’t a one-off project. It’s now part of ongoing portfolio management.
So What Should Large Tenants Do Now?
Given Prologis’ vantage point and past predictive accuracy, it’s reasonable to treat these signals as a working scenario, not a speculative story. For large-scale corporate tenants and C-suite executives, the playbook for 2026 looks something like this:
- Audit your utilization and pipeline.
Know where you’re trending toward capacity, where you’re underutilized, and where you’ll need flexibility. Build options — not just fixed commitments — into critical markets. - Revisit your network design with updated cost assumptions.
Factor in rising freight costs, tighter trucking capacity, and more expensive power. Locations that once felt “too expensive” on rent may now be cheaper when you include transport. - Prioritize power in every RFP.
Require clear documentation of available capacity, upgrade paths, and timing. If automation or manufacturing are part of your plan, treat power as a board-level risk, not an engineering footnote. - Watch the competitive set beyond your own industry.
You’re not just competing with other retailers, manufacturers, or tech firms. You’re competing with e-commerce giants, defense suppliers, and advanced manufacturers for a finite pool of high-quality industrial product. - Use data to negotiate and prioritize.
Prologis’ research shows directional trends; your internal data shows your actual cost-to-serve by node. Combine the two to decide where rent truly matters and where transportation and power are the real swing factors.
The industrial market heading into 2026 isn’t collapsing, and it isn’t exploding. It’s tightening, re-pricing, and re-sorting around power, proximity, and performance. Prologis’ latest outlook offers a clear message: the companies that treat logistics real estate as a strategic lever — not a back-office line item — will be the ones that come out ahead.
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