BOSTON— New Jersey remained the most expensive industrial market in the Northeast in October, with in-place rents reaching $12.12 per square foot, according to CommercialCafe’s November 2025 U.S. Industrial Market Report. Year-to-date transactions in the state averaged $228 per square foot, nearly $100 above the national benchmark, underscoring its continued premium in the region.
Despite high pricing, the report notes rising vacancies in the Northeast, with New Jersey’s vacancy rate climbing to 11.4%, a 280-basis-point increase year over year. Boston also continues to experience elevated vacancies, while Bridgeport saw lease spreads lose momentum.
Pipeline activity across key Northeast markets remained robust. Bridgeport and Boston posted 1.6 million and 2.7 million square feet of industrial space under development, respectively—both ahead of last year’s levels. Meanwhile, Philadelphia surpassed $1 billion in transaction volume, up more than 50% year over year, making it one of the strongest performers in the region.
Smaller Industrial Facilities Emerge as Market Bright Spot
Nationally, the report highlights the resilience of smaller industrial properties—those under 100,000 square feet—amid shifting supply-chain needs and demand for last-mile logistics. Construction starts for these facilities are up 16% year over year, with 340 new projects breaking ground so far in 2025. By contrast, construction of larger facilities has dropped sharply, falling by more than half from last year.
“The 25,000-100,000 square foot segment has remained resilient and consistent in adding supply,” said Peter Kolaczynski, Director, Yardi Research, noting that large-scale projects have seen construction starts halve in the last three years.
Developers, however, continue to face elevated construction and land costs, particularly in dense infill locations where smaller facilities are most in demand. Still, pricing remains strong: sale prices for sub-100,000-square-foot buildings jumped 10.6% year over year, compared to 3.5% growth for larger assets.
National Trends: Prices, Vacancies, and Development
Across the U.S., the average in-place industrial rent reached $8.73 per square foot at the end of October, up 5.7% annually, even as lease spreads tighten in several markets. The national vacancy rate rose to 9.6%, a 240-basis-point annual spike, driven by the ripple effects of heavy deliveries over the past three years.
Roughly 352.9 million square feet of industrial space is currently under construction nationwide—about 1.7% of existing stock—with developers selectively planning new projects amid evolving market conditions.
So far in 2025, industrial transactions total $61.8 billion, averaging $136 per square foot. Recent interest rate cuts and year-end deal activity may push volumes higher before 2025 closes.
Regional Highlights
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Western markets: Rent growth has slowed sharply, with six of nine major markets now below the national average.
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Midwestern markets: Construction activity is picking up as developers capitalize on lower labor and material costs and improved borrowing conditions.
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Southern markets: Expansion continues, with Baltimore as the only southern market reporting a year-over-year decline in its development pipeline.
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Northeastern markets: Persistently high vacancies in New Jersey and Boston, with Bridgeport seeing reduced lease-spread momentum.
Miami Leads U.S. in Rent Growth
Miami once again topped the nation in rent appreciation at 8.9% year over year, supported by strong port activity, rapid population growth, limited developable land, and high-priced new inventory. The market delivered 19 million square feet of space since 2022 but now faces a supply squeeze, with only 2.1 million square feet currently under construction.
Despite slower absorption of recent deliveries, the report predicts sustained demand in Miami due to its critical logistics role and strong economic fundamentals.
