2025 Industrial Construction Cost Guide

U.S. Focus

BUILD-TO-SUIT PREFERENCE INCREASES

Softening fundamentals have begun to shift the type of industrial space under construction and being delivered to U.S. markets. As of the first quarter, most space being delivered (71%) and under construction (66%) remains speculative (spec). However, the share of build-to-suit (BTS) space has begun to edge upward as developers adopt a more selective and cautious approach to spec groundbreakings. BTS deliveries climbed from 17% of total completions in 2023 to 29% in the first quarter of 2025. Similarly, BTS inventory under construction rose from 33% at year-end 2024 to 93.3 msf, accounting for 34% of total inventory under construction in the first quarter of 2025. This shift toward BTS over spec development reflects some concern over rising vacancies and shifting market fundamentals.

Historical BTS vs. Speculative Deliveries BTS share of deliveries has reached its highest point (29%) since 2021

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024 Q1

U/C

2025

BTS Share

SPECShare

Source: Cushman & Wakefield Research

14

Cushman & Wakefield