Northeast U.S. Logistics Construction Watch Report Q1 2025

As demand for industrial space remained soft throughout the Northeast U.S. industrial and logistics (I&L) market, the development pipeline continued to shrink, contracting 20.8% quarter-over-quarter to 24.4 million square feet (sq. ft.). New development slowed amid concerns of oversupply and economic challenges. Active construction in the combined Philadelphia Metro and PA I-78/I-81 Corridor contracted 25.3% quarter-over-quarter to 11.8 million sq. ft., representing 48.4% of the Northeast U.S.’s total. Deliveries in the two markets totaled 6.4 million sq. ft., 61.8% of the Northeast’s total. In New Jersey, active construction decreased 24.2% quarter-over-quarter to 7.2 million sq. ft. after deliveries hit their third highest total in five years. Deliveries in Northern and Central New Jersey represented 31.6% of the region’s quarterly total.

Construction starts continued to trend downward in the region with only 3.4 million sq. ft. breaking ground in Q1 2025. Pre-leasing rates for active construction increased 560 basis points (bps) to 22.6% after few properties broke ground and 10.2 million sq. ft. of unleased space came onto the market. Virtually all the 10.3 million sq. ft. that delivered in Q1 2025 was unleased Class A space.

Click on the link below to explore the report.