Northeast Industrial & Logistics Construction Watch Report Q2 2025

The Northeast U.S. industrial and logistics (l&L) market saw a slight uptick in the development pipeline, reversing the downward trend in development following the decrease in demand after the pandemic-era high. The development pipeline increased 6.1% quarter-over-quarter to 25.9 million square feet (sq. ft.) after new construction starts narrowly outpaced deliveries. Deliveries slowed to 8.4 million sq. ft., down from 10.3 million sq. ft. in the previous quarter. The dampened pace of deliveries will help markets absorb excess vacancies that accumulated during the pandemic-era ramp up in construction. Active construction in the combined Philadelphia Metro and PA 1-87/1-81 Corridor increased 16.9% to 13.8 million sq. ft., representing 53.3% of the Northeast U.S.'s construction total. Completions in the two markets totaled 5.5 million sq. ft., 65.5% of the region's total deliveries. In New Jersey, active construction increased 8.3% quarter-over-quarter to 7.8 million sq. ft. Deliveries in Northern and Central New Jersey totaled 2.2 million sq. ft., representing 26.2% of the region's total. 
Construction starts totaled 8.5 million sq. ft., up significantly from the 3.4 million sq. ft. that broke ground in the previous quarter. Pre-leasing rates for active construction increased 690 basis points (bps) to 29.5% after 7.3 million sq. ft. of unleased space delivered.