Industrial Investors Are 'Getting Back In The Game' As Sector Is Poised For Standout Year

Industrial capital markets brokers are pouring themselves an extra cup of coffee and rubbing the sleep out of their eyes as investment in the sector accelerates. 

Jack Fraker, Newmark president and global head of industrial and logistics capital markets, said younger members of his team are increasingly showing up “at the crack of dawn,” mirroring the work habits of industry veterans like himself. Those same analysts are underwriting industrial deals late into the night as client demand accelerates. 

“What we're seeing is a renewed interest in this asset class,” Fraker said. “Domestic investors, REITs, private equity funds and global investors are all getting back in the game.” 

The latest industrial data backs Fraker’s assessment of the market. Investment volume is on pace to finish with its third-strongest year in the sector's history, with a second consecutive year of growth following a sharp volume decline in 2023, according to Avison Young’s U.S. industrial market report.

Fraker, a broker who has been behind more than 1,800 industrial deals worldwide worth more than $45B combined, pegged the start of the third quarter as the shift toward a tangible uptick in investor activity. He said some of the properties his team helps sell now are getting 20 offers, up from only a handful of interested buyers a year ago.

U.S. industrial transaction volumes accelerated in Q3, bringing year-to-date liquidity 16% above last year's pace, according to a JLL national industrial market report. Transaction volumes totaled $67.3B through the third quarter. That same quarter’s activity surpassed both the average quarterly pace from the first half of the year and Q3 2024 volumes, according to JLL.

Rising net operating income, driven by steady rent growth and mark-to-market upside as leases reset, has been a key factor behind increased investor interest in the asset class, Fraker said.

“There is a return of better prices that’s happening right before our eyes,” he said. 

The makeup of the increased transaction volume is largely concentrated in a flurry of smaller sales. Deals under $100M made up 70% of investment sales volume in the last four quarters — up from a long-term average of 60%, according to Newmark’s Q3 industrial market report. 

The sharpest uptick in activity has been with deals between $25M and $100M, according to Newmark. Deals between $100M and $250M have grown over the last year, but there has been a significant decline in the largest deals — those totaling $250M or more — with fewer portfolios trading.

But while there haven’t been as many major portfolio sales, there are investors starting to sniff around for opportunities of scale, Fraker said. 

When the market was softer, there wasn’t as much of an appetite for buyers to invest in larger portfolios, Fraker said. Owners of those big portfolios weren’t interested in selling in a weaker market and largely weren’t in distressed positions that forced their hands. 

The market makeup may change in 2026, as Fraker said the owners he works with have asked his team to start underwriting their portfolios so they are ready to go to market at the beginning of next year. JLL wrote that it expects the return of large-deal transactions as the single-asset, single-borrower market “gains footing” and investor confidence improves. 

Larger portfolio sales could create opportunities for major investors to deploy capital in the industrial sector. 

“You can really get money to work and scale in our asset class, and that's not lost on overseas investors, but it's also true for domestic pension funds,” Fraker said. 

Improving national industrial fundamentals across key markets is fueling cautious optimism for 2026.

Average asking rents increased 1.5% year-over-year to $10.36 per SF in Q3, driven by supply-constrained markets with limited new deliveries and strong tenant demand, according to JLL. Oversupplied markets are weighing on growth, as landlords are prioritizing occupancy retention over pushing rent growth, the brokerage said. 

The third quarter was also the best quarter for new leasing since 2023, with notable increases in bigger-box leasing, according to Newmark. The firm cautioned that, despite growing momentum, new leasing volumes remain below historical norms and are still working back toward their prepandemic share of the occupied U.S. industrial base.

Investors who bought industrial assets four or five years ago when debt was cheapest were pursuing long-term strategies, not quick flips, Fraker said. While returns can ebb and flow over a decadelong hold, the sector is now showing signs of recovery after a period of headwinds.

One of industrial real estate’s strengths is its long lease structure, which allows assets to weather economic cycles and geopolitical uncertainty, Fraker said. A 10-year lease is often subject to multiple disruptions, reinforcing the importance of securing credit tenants that can withstand those shifts, he said.

“It's not a short-term-gain game, and we’ll get over these different cycles,” Fraker said.