TAG Industrial Watch: December 6, 2025

The outperformance of small industrial properties continues to capture headlines as the 4.9% vacancy rate among 10,000 to 50,000-square-foot facilities remains well below the 9.3% vacancy rate for big-box warehouses over 200,000 square feet. Despite small industrial properties maintaining their advantage in the market when it comes to availability, big-box warehouses have still experienced higher annual rent growth for more than a decade. However, the big-box edge over rents is quickly becoming a thing of the past. At the height of the industrial boom in mid-2022, big-box rents were rising at 12.9%, 440 basis points higher than the 8.5% rate for small industrial properties. With one month to go in 2025, that lead has been trimmed to 50 basis points with big-box at 1.8% and small industrial at 1.3% (CoStar). Based on the current trajectory, small industrial properties can eclipse big-box by the end of the first quarter of 2026. With institutional investors now eyeing smaller industrial properties, this is welcoming news for existing landlords.