Something interesting is happening in the industrial real estate market. While headlines focus on tariffs and trade disputes, companies are quietly signing warehouse leases at a pace we haven’t seen since the pandemic-era scramble for space.

JLL’s Q1 2026 U.S. Industrial Market Dynamics Report, released last week, tells a clear story: 145 million square feet of warehouse leases were signed in the first three months of 2026. That’s a 17.8% increase over the same period last year. More than 71% of those were new leases, not renewals. Companies aren’t just holding onto existing space. They’re actively expanding their warehouse footprints.

The numbers get more interesting when you dig into the segments. Big-box warehouse leasing (facilities of 500,000 square feet or more) jumped 80.7% year over year. Third-party logistics providers drove 65.2% more leasing activity than Q1 2025, signing over 30 million square feet. And here’s one nobody expected: data center construction is now spilling over into warehouse demand, as companies lease industrial space to stage servers, cooling systems, and networking equipment before deployment.

What does all this mean for supply chain professionals? Quite a bit, actually.

The Reshoring and Redundancy Effect

The single biggest driver behind the leasing surge is straightforward: companies are done betting on lean, centralized distribution networks.

Five years of supply chain disruptions have taught a painful lesson. A single distribution center serving half the country works great until it doesn’t. Port congestion, weather events, labor shortages, and now tariff uncertainty have pushed companies to build redundant inventory networks with safety stock positioned across multiple geographies.

JLL’s Elizabeth Holder, Senior Analyst for Industrial Research, confirmed this directly. “Supply chain resilience strategies are accelerating the build-out of redundant inventory networks and safety stock positioning, requiring tenants to secure additional warehouse capacity across multiple geographies rather than relying on centralized distribution models,” she said.

This isn’t theoretical anymore. Companies are signing leases and committing capital to multi-node distribution networks. The days of optimizing purely for transportation cost and consolidating into fewer, larger facilities are giving way to a more distributed model that prioritizes proximity to customers and redundancy against disruption.

Nearshoring is adding fuel to the fire. As manufacturers bring production closer to North American markets (whether driven by tariff avoidance, supply chain risk reduction, or both), they need warehouse space to support those operations. Every new production facility needs inbound staging, finished goods storage, and distribution infrastructure. That’s showing up in the leasing data.

The 3PL Warehouse Grab

If one number stands out in JLL’s report, it’s the 65.2% annual increase in 3PL leasing activity. Third-party logistics providers signed more than 30 million square feet of warehouse space in Q1 alone.

That’s not a blip. It’s a signal that companies are increasingly outsourcing supply chain operations to partners who can provide network flexibility during volatile periods. When you don’t know what tariff rates will look like in six months, committing to a 10-year lease on your own facility feels risky. Handing that problem to a 3PL who can flex capacity up or down, across multiple facilities and geographies, feels a lot smarter.

GXO Logistics provided a real-world example last week when CEO Patrick Kelleher reported 10.8% revenue growth in Q1, with $227 million in new business wins and a record $2.7 billion sales pipeline. His explanation was telling: “Geopolitical situations and economic situations like tariffs and so forth can really be a catalyst for our industry and necessitate supply chain change.”

In other words, the uncertainty that’s making shippers nervous about long-term commitments is the same uncertainty that’s driving them toward 3PL partnerships. The 3PLs are leasing aggressively because they see the demand coming.

Holder noted that this trend should continue. “3PLs have become essential partners offering the flexibility and expertise that many industrial-using tenants need to navigate volatility,” she said. The companies that tried to weather supply chain disruptions on their own in 2020 and 2021 are now recognizing that distributed, flexible logistics networks managed by experienced operators may be worth the margin they give up.

Big-Box Is Back (With a Twist)

The 80.7% surge in big-box leasing (spaces of 500,000+ square feet) marks a sharp reversal from 2025, when companies took a cautious, wait-and-see approach to large facility commitments.

That caution made sense at the time. Trade policy was in flux, and nobody wanted to sign a seven-year lease on a million-square-foot building without knowing what the tariff landscape would look like. But by Q1 2026, the calculus had shifted. Companies realized that uncertainty wasn’t going away, and the cost of not having enough space was becoming more expensive than the risk of having too much.

There’s a strategic angle to the big-box trend, too. Larger facilities are increasingly attractive because they allow companies to consolidate multiple operations under one roof. A single 800,000-square-foot building can house automated sortation, bulk storage, e-commerce fulfillment, and returns processing. That consolidation makes it easier to deploy automation (robots and conveyor systems work better at scale) and to manage labor (one large team instead of three smaller ones spread across separate buildings).

Asking rates for mega-box warehouses rose 14.5% year over year, the highest increase of any Class A size segment. Developers are responding by launching new construction projects, but the pipeline takes 12 to 18 months to deliver. In the meantime, companies hunting for large-format space in desirable markets are finding limited options and higher prices.

The Data Center Surprise

Perhaps the most unexpected finding in the JLL report is the role data center construction is playing in warehouse demand.

It turns out that building and operating data centers requires a massive supply chain of its own. Servers, cooling systems, backup power equipment, and networking hardware all need to be staged, tested, and deployed on tight timelines. Companies are leasing significant warehouse and distribution space specifically to support data center operations.

This is a new category of industrial tenant that barely existed five years ago. And given the ongoing AI infrastructure buildout, with hyperscalers like Microsoft, Google, Amazon, and Meta all racing to expand data center capacity, this source of warehouse demand isn’t going away anytime soon.

For supply chain professionals, this creates both opportunity and competition. Data center operators often need the same types of modern, well-located warehouse space that traditional distribution tenants want. In markets like Northern Virginia, Phoenix, and Dallas, where data center construction is concentrated, this additional demand is tightening an already competitive market.

What the Vacancy Rate Tells Us

Despite all this leasing activity, the national vacancy rate held flat at 7.5% in Q1. That might seem contradictory until you look at the new supply entering the market.

Q1 saw 50.9 million square feet of new warehouse deliveries, almost perfectly matching the 50.9 million square feet of net absorption. The market is absorbing new supply as fast as developers can deliver it, which is keeping vacancy rates stable rather than driving them down.

JLL expects vacancy to begin trending lower as existing supply gets absorbed and new construction starts remain relatively flat. For tenants, that means the window of leverage in lease negotiations may be closing. Companies that have been shopping for warehouse space but holding off on commitments may find fewer options and higher rates as 2026 progresses.

Asking rates were up just 0.8% overall, to $10.34 per square foot. Holder attributed the modest increase to a “period of stabilization” following the construction boom of 2023-2024, which added enough supply to keep rents in check even as demand grew. But with mega-box rates already rising 14.5% and vacancy expected to tighten, broader rate increases may follow.

What This Means for Supply Chain Leaders

Lock in space before it gets more expensive. The combination of strong leasing activity, tightening vacancy, and rising mega-box rates suggests that waiting to sign a lease isn’t going to get you a better deal. If you have a network expansion plan on the drawing board, moving sooner rather than later is probably the right call.

Consider 3PL partnerships for flexibility. If you’re not ready to commit to your own facility, the 3PL market is actively expanding capacity. The 65.2% increase in 3PL leasing means more options for outsourced warehousing and fulfillment. Look for providers who are investing in automation and multi-client facilities, as those operations tend to offer better service levels and more competitive pricing.

Factor data center competition into your site selection. If you’re evaluating warehouse locations in markets with heavy data center activity, expect tighter supply and higher rents. Broadening your search to secondary markets or less obvious locations could yield better terms and faster availability.

Build redundancy into your network. The shift from centralized to distributed distribution isn’t a fad. It’s a structural change driven by five years of disruption and an uncertain trade environment. Companies that still rely on one or two mega-facilities for national distribution are carrying more risk than they probably realize.

The warehouse leasing numbers from Q1 2026 aren’t just a real estate story. They’re a leading indicator of how companies are restructuring their supply chains for a world where disruption is the baseline, not the exception.