It\u2019s safe to say at this point that the tariffs imposed by the new U.S. administration on China, Mexico, Canada and others have injected further uncertainty into the U.S. industrial sector. Specifically, short-term effects are likely to include delays in leasing decisions, higher construction costs and supply chain disruptions. That\u2019s according to the latest CommercialCafe industrial report<\/a>, which also notes that these three nations collectively account for more than two-fifths of U.S. imports.<\/p>\n Even before the tariff announcements, anticipation alone saw port activity spike in January: The country\u2019s 10 busiest ports logged an 18% year-over-year (Y-o-Y) increase as companies scrambled to stockpile goods ahead of the expected tariffs.<\/p>\n Looking ahead, the industrial construction picture is complicated. While onshoring of manufacturing has been a major driver of industrial construction in recent years (and on a large scale), rising costs \u2014 especially for steel and aluminum \u2014 could, at least for now, dampen enthusiasm for reshoring efforts. Although reports<\/a> since the tariff announcement suggest that some projects might be canceled or postponed, others are pushing forward. Accordingly, the new administration has stressed that the ultimate onshoring goal will take time \u2014 potentially up to two years \u2014 which it has admitted may cause some short-term pain, at the least for some projects.<\/p>\n Digging into the numbers from the CommercialCafe report, the U.S. industrial active pipeline stood at 344.9 million square feet in February, just 1.7% of existing stock. Last year, construction starts dropped sharply due to broader economic factors \u2014 a trend likely to persist in 2025.<\/p>\n Leading with the largest active pipeline is Dallas, which tops the list with 23.7 million square feet underway. It\u2019s followed by Phoenix at 16.1 million and Houston at 13.8 million. Notably, Dallas and Phoenix have held the top spots for a while, but Houston\u2019s pipeline has increased 44% Y-o-Y. In fact, since the Panama Canal expansion last decade, the Port of Houston has become the fifth-busiest in the nation for containers, as well as the largest by total tonnage, and the busiest along the Gulf Coast, thereby feeding demand for warehouse and distribution space.<\/p>\n On the rent front, the national average for industrial space hit $8.43 per square foot in February \u2014 up 7.1% Y-o-Y. At the same time, growth slowed in former hotspots like southern California\u2019s Inland Empire (up 8.9% to $11.06 per square foot) and Los Angeles (up 7.7% to $15.09 per square foot). For context, last February, Inland Empire logged 12.9% growth and Los Angeles hit 12.1%. Still, Los Angeles remains among the top three markets \u2014 all in California \u2014 for in-place rents. More precisely, Orange County led at $16.83 per square foot, followed by Los Angeles, then the Bay Area ($13.66). At the other end of the spectrum, Memphis, Tenn., is the most affordable at $4.12 per square foot, followed by St. Louis ($4.93) and Kansas City, Mo. ($4.96).<\/p>\n Meanwhile, the gap between new leases ($10.56 per square foot) and in-place rents narrowed to $2.13 nationally as tenants capitalize on rising vacancies. However, CommercialCafe expects this gap to shrink further as new supply \u2014 mostly premium, high-tech facilities \u2014 is likely to command higher rates. The biggest spread between new leases and the current market average was in Bridgeport, Conn., with a $5.18 per square foot difference. Other markets with high new-lease premiums included Miami ($4.92), Boston ($4.09), Seattle ($3.92) and New Jersey ($3.84). In contrast, Kansas City, Mo., had the smallest spread, with just an eight-cent difference.<\/p>\n Finally, industrial transactions hit $6.1 billion year-to-date with an average price of $127 per square foot \u2014 up 5% since 2022. Dallas-Fort Worth led sales volume at $415 million, followed by New Jersey ($351 million) and Los Angeles ($233 million). The latter\u2019s tally stands out given that the total is nearly triple the $80 million recorded 12 months ago. Lastly, Orange County remains the priciest market at $340 per square foot.<\/p>\n For more analysis across all major industrial markets in the U.S., see CommercialCafe’s original report<\/a>.<\/p>\n\nFebruary Industrial Market Stats: Houston Construction Jumps 44% Y-o-Y<\/h2>\n