As retail and e-commerce companies adjust their expansion strategies, third-party logistics (3PL) providers are rapidly occupying an increasing share of warehouse and supply chain space across the United States. A recent CBRE report highlights this notable trend and examines the driving forces behind it, offering valuable insights into the future direction of logistics real estate.
3PL Leasing Demand Surges: Dominating Industrial Real Estate
According to CBRE's findings, 3PL service providers accounted for 38 lease agreements totaling 28.9 million square feet (MSF) among the top 100 US industrial real estate transactions in the first half of 2025. This represents significant growth compared to 28 leases during the same period last year, surpassing traditional anchor tenants—retail and e-commerce companies—as the dominant force in industrial real estate. This surge reflects large corporations' growing preference to outsource warehousing and supply chain operations to specialized 3PL providers to optimize efficiency and reduce costs.
In contrast, general retail and wholesale tenants signed 28 leases covering 21.4 MSF, maintaining substantial presence but lagging behind 3PL expansion rates. More notably, e-commerce leasing activity plummeted to just seven agreements totaling 4.7 MSF, a dramatic decline from 31 leases (13.2 MSF) during the same period last year. CBRE analysts note that many e-commerce companies are reevaluating their operational models following years of aggressive expansion.
Large Warehouse Leasing Slows: Corporate Caution Prevails
The report also indicates slowing activity in large warehouse leases (exceeding 1 MSF). Only 13 such leases were signed in 2025's first half, totaling 15.5 MSF—significantly below the 31 agreements (34.5 MSF) recorded during the comparable 2024 period. CBRE attributes this primarily to more cautious corporate leasing decisions and reduced expansion appetite. Rising rental costs have further encouraged tenants to favor smaller spaces.
Regional Market Variations: Inland Empire Leads
Geographically, Southern California's Inland Empire emerged as the most active market with 14 leases covering 9.8 MSF. Pennsylvania's I-78/I-81 corridor followed with nine leases totaling 6.3 MSF, while Dallas-Fort Worth ranked third with seven agreements spanning 5.8 MSF. These regions' strong performance reflects their strategic locations, robust logistics infrastructure, and growing consumer demand.
Expert Analysis: Underlying Drivers of 3PL Growth
James Breeze, CBRE's Global Head of Industrial & Retail Research, explained to Logistics Management that retailers and wholesalers increasingly outsourcing distribution operations primarily fuels 3PL leasing demand. He emphasized that outsourcing helps companies reduce capital expenditures, enhance seasonal inventory flexibility, streamline market-specific scaling, and focus investments on core competencies rather than product distribution.
Breeze anticipates continued 3PL market share growth in coming quarters, noting that distribution specialization and technological requirements make professional 3PL partnerships increasingly advantageous. Outsourcing also helps businesses navigate economic and supply chain uncertainties more effectively.
Regarding large warehouse leasing, Breeze predicts that as more companies outsource distribution to 3PLs, these providers' storage needs will expand, revitalizing the large warehouse market. "We may see more 1 MSF+ leases—June alone accounted for six of the 13 such transactions," he noted. "Major leases will increasingly concentrate among 3PLs rather than traditional retailers and wholesalers."
E-Commerce Demand Shift: Outsourcing as New Paradigm
Breeze clarified that declining e-commerce leasing directly correlates with 3PL growth, as specialized distribution operations increasingly transfer to providers with infrastructure and expertise for e-commerce fulfillment. This strategic shift allows online retailers to reduce operational costs and improve service efficiency through professional logistics partnerships.
Market Implications: 3PL Impact on Industrial Real Estate
The 3PL sector's industrial real estate ascendancy signals profound logistics industry transformation, with several key implications:
Demand Restructuring: 3PL growth will reshape industrial space requirements, with traditional retail/e-commerce needs potentially declining while 3PLs seek larger, technologically advanced facilities. Developers must adapt offerings to meet 3PLs' customized solutions.
Geographic Reconfiguration: 3PL location strategies differ from traditional tenants, favoring areas near transportation hubs like ports, railways, or highways. Established logistics centers may face challenges as new nodes emerge—the Inland Empire's leadership stems partly from its connectivity to Los Angeles/Long Beach ports.
Technology-Driven Innovation: 3PLs frequently implement advanced systems like automated storage, smart sorting, and real-time tracking, requiring superior facility capabilities. This pressures developers to invest in smarter, more efficient logistics properties.
Competitive Landscape Evolution: Intensifying 3PL competition sees large providers consolidating market position through mergers and expansion, while smaller firms face heightened pressure. This dynamic affects real estate negotiations, with major 3PLs commanding favorable lease terms and smaller players pursuing niche strategies.
Sustainability Requirements: Growing environmental consciousness leads 3PLs to prioritize facilities meeting green building standards, energy-efficient equipment, and renewable energy use. Developers must incorporate sustainable features to remain competitive.
Strategic Responses for Industrial Developers
To capitalize on 3PL-driven opportunities, industrial real estate developers should consider:
Deepening 3PL Engagement: Strengthen dialogue with 3PLs to understand their business models, operational needs, and growth plans. Deliver tailored solutions fostering long-term partnerships.
Optimizing Site Selection: Monitor evolving logistics geography, targeting emerging hubs near new ports, rail interchanges, or cross-border e-commerce centers.
Accelerating Technological Investment: Prioritize automation, IoT integration, and intelligent systems to create high-performance facilities matching 3PL operational requirements.
Emphasizing Sustainability: Adopt green construction practices, energy-saving technologies, and renewable energy sources to align with 3PL environmental priorities and enhance corporate reputation.
Maintaining Market Agility: Preserve flexibility to adjust strategies amid rapid market changes, offering diversified leasing models and services accommodating varied client needs.
Conclusion: 3PLs Herald New Logistics Real Estate Era
The 3PL sector's industrial real estate prominence marks a pivotal logistics industry milestone, reflecting strengthened outsourcing trends and heralding fresh development opportunities. Industrial developers must proactively adapt to market shifts, leveraging 3PL growth to secure competitive advantage and shape the future of logistics property.