U.S. warehouse construction is up 18% as data-center supply chains drive a new build cycle

More than 305 million square feet of warehouse space was under construction across the United States in the second quarter of 2026, up 18% from the same period in 2025, according to real-estate services firm Cushman & Wakefield. That figure, reported by The Wall Street Journal, also marks the second consecutive quarter of year-over-year growth, a signal that developers are no longer waiting out the post-pandemic demand slump that had frozen groundbreakings since 2023.

Data-center supply chains as the new demand anchor

The recovery is not being led by the e-commerce wave that defined the last cycle. Instead, suppliers of data-center equipment, the server manufacturers, power hardware distributors, and networking gear providers feeding the AI infrastructure buildout, are generating a new category of bulk industrial demand. These tenants need large, accessible facilities to receive, stage, pre-configure, and ship hardware to data-center campuses that are being developed at pace across the Sun Belt, the Mid-Atlantic, and the Pacific Northwest.

The connection between data-center construction and logistics real estate is now tight enough that the two sectors are moving in tandem. Construction Dive flagged the WSJ report alongside coverage of political disputes over data-center siting and power costs, reflecting how deeply the infrastructure build cycle is reshaping multiple adjacent industries at once.

What the pipeline shift means for distribution network planning

For supply-chain and operations leaders, the 18% jump in active construction pipeline changes the negotiating environment in ways that have been absent for several years. During the 2023-2025 downturn, speculative development dried up, vacancy in certain high-demand submarkets stayed historically low, and tenants had limited leverage on lease terms. A swelling pipeline restores optionality, particularly for companies looking to add square footage in markets where data-center supply chains are concentrating.

That concentration matters for site-selection decisions. Data-center campuses tend to cluster near high-capacity power grids and fiber infrastructure. Warehouse developers following that demand are building in those same corridors, which means distribution operations that serve data-center customers or co-locate with their supply chains may find new inventory in markets they had previously written off as too tight.

The 305-million-square-foot figure covers space actively under construction, not just permitted or planned, so it represents a near-term supply increment that will hit the market within the next 12 to 24 months depending on project timelines. For procurement teams renewing leases or evaluating network consolidations, that timeline is directly relevant to decision windows opening now.

Reading the second consecutive quarter of growth

One quarter of recovery can be noise. Two consecutive quarters of year-over-year growth in industrial starts is a pattern. Developers, who carry the most capital risk in any construction cycle, generally do not restart speculative projects until they see forward leasing activity or tenant commitments sufficient to underwrite the pro forma. The fact that groundbreakings have accelerated two quarters running indicates that leasing conversations in late 2025 and early 2026 gave developers enough conviction to move.

That dynamic is worth watching for any operations team benchmarking their real-estate costs. As more supply enters the market, the rent escalation pressure that characterized the 2021-2023 period is likely to moderate in markets where new construction is concentrated. The extent of that relief will vary by submarket, particularly in high-demand corridors where data-center power constraints limit available land.

The data from Cushman & Wakefield provides a national aggregate, and regional variance will matter. Teams managing multi-node distribution networks should cross-reference the national trend against submarket vacancy and absorption figures before drawing conclusions about specific sites. The overall trajectory, however, is now clearly one of supply recovery after a prolonged drought.