The outlook for the logistics real estate market is pointing towards a strong trajectory, according to the new edition of the Industrial Business Indicator (IBI) issued this week by San Francisco-based real investment trust company Prologis.

Prologis defines the IBI as a survey of customer sentiment focused on customer activity in warehousing. 

The April IBI Activity Index reading came in at 58.6, which the report said reflects increased warehouse activity, remaining in the 55-to-60 category, while trailing January’s 59.1 reading, its highest level since November 2024.

Prologis explained that warehouse activity has seen continued expansion in 2026, and is “holding firm in growth territory,” amid ongoing geopolitical uncertainty, with the market benefitting from what it called sustained underlying demand, paced by advanced manufacturers and a rebound in retail and services activity. What’s more, it noted that the logistics real estate market is now entering a critical inflection point, with logistics space demand gaining strength in tandem with new supply slowing to its lowest level in a decade—with this imbalance expected to tighten vacancy levels and increase competition for prime and well-located assets through the balance of the year.

Looking at some key metrics, the IBI Industrial Business Indicator noted the following:

• logistics absorption space is improving and expected to approach 200 million square-feet (MSF), topping 2025, while below normal absorption levels, with 2026 new deliveries pegged to come in at the lowest level in a decade, at around 190 MSF;
• an evolving customer mix, with e-commerce and essential goods companies growing footprints in key consumption-oriented locations; 
• gains in manufacturing output over the past six months;
• shifting pricing power across most U.S. markets, as rent growth turned positive in the first quarter for the first time since 2023, coupled with construction activity slowing to 1.7% of stock, trailing the 2.5% pre-pandemic average and also putting upward pressure on rents as fewer buildings come online

When asked if the IBI Activity Index has the potential to remain at, or around, its current level going forward, Melinda McLaughlin, Senior Vice President and Global Head of Research at Prologis, told LM it is somewhat unclear.

“No one has a crystal ball. However, several demand drivers suggest the IBI Activity Index could remain near current levels,” she said. “Inventories remain low, which could prompt restocking activity through the year. At the same time, leasing activity has accelerated in recent quarters, and vacancy appears to be at or near peak levels, suggesting the market may be nearing an inflection point.”

As for what steps occupiers and lessors can take to secure space amid tightening supply, McLaughlin said that for companies looking to secure logistics space amid tightening supply, speed is key.

The reason for that, she said, is that in most U.S. markets, speculative space under construction is at low levels and vacancies are declining, making high-quality logistics space more limited. And combined with rents that are either increasing or positioned to inflect, occupiers that act with urgency are likely to be better positioned.

And as availability starts to shrink, she noted that the sooner companies act to start securing space, the better.

“Availability varies by market, building size and building type,” said McLaughlin. “In the most constrained markets and for larger-format facilities, availabilities are already falling well below historical norms, with several pockets at six months of supply or less.”

With rent growth now turning positive, coupled with a declining construction pipeline, McLaughin said that under Prologis’s base case the market is entering the very early stages of a new rent growth cycle, with the caveat that the timing and magnitude will vary significantly by location and building type.

“With vacancies beginning to decline, demand strengthening and new supply running well below historical norms, we expect positive but mild aggregate rent growth in 2026, following the rent reset of the past two and a half years,” she said. “We are also monitoring upward pressure on construction costs, which could create upside risk to our expectations.”