Why Industrial US Property Is Great For Investors in 2025

There’s a slice of the US market quietly delivering returns. It doesn’t depend on foot traffic or flashy storefronts. Just consistent performance: industrial real estate.

Think warehouses: where your online orders are picked, packed and shipped. While other sectors adjust to new trends, this one has kept moving.

Here’s why industrial real estate is on investors’ radar. Or head straight to the app to take a look.

Warehouses are working

Warehouses will see c. 3% rent growth over the next two years while office buildings sit half-empty and retail stores play catch-up with e-commerce companies.

Calculated expansion means companies are looking for space. In Q2 2025, companies leased almost 30 million square feet of industrial space. By the end of 2025, that is expected to reach 156 million.

Vacancy rates are tightening across the country. And in high-demand areas, landlords are seeing stronger pricing power and long lease terms.

A new type of tenant

So what changed? The tenant mix evolved.

Big-name logistics firms, cold storage operators, clean energy companies, data centres, and manufacturers. These tenants need reliable, long-term facilities - often with costly infrastructure they can’t easily relocate.

That means lower turnover and more predictable income, ideal conditions for long-term investors.

Lower supply = more pricing power

After a post-pandemic construction boom, developers have slowed down. Higher interest rates and rising costs have made new projects harder to justify. Industrial property completions are projected to fall through the second half of 2025.

A few years on, vacancy rates are low and they keep tightening. The US national average sits at 7.1%.

With fewer new spaces coming online and demand holding strong, key markets could be seeing year-on-year rent growth.

Made in the USA (again)

US manufacturers are bringing production home after years of overseas reliance. Over 30% are reshoring in 2025 alone, driving demand for new factories, and with them, warehouses and distribution hubs.

E-commerce keeps expanding

E-commerce now represents 16.2% of all US retail sales as of Q1 2025, and is expected to hit 22.6% by 2027.

Every order placed online needs somewhere to be processed and shipped.

That means fulfilment centres, last-mile delivery hubs, and logistics infrastructure, especially near large cities where faster delivery justifies premium rent.

Long-term leases with lower risk

Industrial leases typically span 3 to 10 years, often with annual rent increases built into the contract. Tenants invest heavily in fit-outs and equipment, which makes moving costly.

This results in:

• Predictable cash flow that grows over time
• Lower tenant turnover compared to retail or office
• Reduced default risk (especially with creditworthy occupiers)

While stability is a feature of industrial leasing, all real estate investments carry risk, including vacancy, tenant default, and market fluctuations.

Institutional investors are returning

After pausing in 2023, institutional investors are returning to the sector. Nearly 70% of commercial property investors plan to expand their portfolios in 2025, many eyeing industrial.

Big names like Prologis and Blackstone, among others, are active again. So are private equity and family offices, drawn by long leases and stable income.

Where opportunity looks strongest

Some cities are leading the way in the industrial property market:

• Dallas-Fort Worth: America's logistics center. Central location, affordable land, major tenant expansion. (2025)
• Phoenix: Reshoring powerhouse, especially semiconductor and EV supply chains. (2025)
• Inland Empire, California: Record-high rents, low vacancy, unmatched port and consumer access. (2025)
• Atlanta: Major 3PL hub with incredible rail and highway infrastructure. (2024)
• Chicago: Midwest distribution nerve center with rock-solid long-term demand. (2025)
• Baltimore: 5.5% vacancy with 8% annual rent growth – well above historical averages.
• Minneapolis-St. Paul: Possibly the strongest market nationally, 4.2% vacancy with no slowdown signs.

Opening the market to everyone

Industrial real estate used to be for the few. Now it’s for the many.

Stake is opening the door to this high-demand sector. With just AED 500 or SAR 500, you can invest in a professionally managed fund.

The fund includes 27 warehouses across Baltimore and Minneapolis, two of America’s most established logistics markets, and is managed by a leading fund manager with 40+ years of experience.

Note: This is a target return and not guaranteed. All investments carry risk.

The steady performer

Industrial real estate rarely makes headlines, but it’s steady.

In good times and bad, tenants still need space to move goods and run operations. For investors, that means consistent income and access to the infrastructure backbone of the modern economy.

Coming soon: our first US industrial real estate fund. View on the app.

All Investments carry risks. Stake Funds is regulated by the CMA as a Fund Distributor in KSA.