After several years of unprecedented industrial expansion, the Charlotte market is entering a more disciplined phase of growth, and that may ultimately prove healthier for the region long term. While headlines continue to focus on elevated vacancy rates, the underlying fundamentals of the market remain sound, particularly for modern, Class A product and strategically located logistics corridors.
Charlotte absorbed nearly 60 million square feet of industrial deliveries since 2020, fundamentally reshaping the region’s supply chain infrastructure and elevating the market into one of the Southeast’s premier logistics hubs. Today, the conversation is no longer centered around whether Charlotte can attract industrial users, it is about how the market recalibrates after an aggressive development cycle.
That recalibration is already underway. Construction starts have slowed considerably, with the development pipeline contracting to approximately 4.8 million square feet in first-quarter 2026, down significantly from the previous 10-quarter average of 8.7 million square feet.
At the same time, leasing activity has remained healthy, totaling approximately 2.2 million square feet during the first quarter. Vacancy appears to be flattening as leasing volume continues to outpace new deliveries.
One of the clearest trends shaping the market is the continued “flight to quality” among occupiers. Large users are increasingly prioritizing modern facilities with higher clear heights, enhanced trailer storage, advanced power capabilities and proximity to labor pools and transportation infrastructure. In 2025, roughly 73 percent of all leasing activity occurred within Class A product, totaling nearly 6.8 million square feet leased.
That trend has been particularly evident among bulk distribution users. Buildings larger than 500,000 square feet have seen direct vacancy decline by more than 5 percent year-over-year, driven by major occupiers re-entering the market. Users such as Walmart, Momentec Brands, MAT Holdings, Amazon and UTZ collectively helped absorb large blocks of space throughout the region.
At the same time, the market is beginning to show a widening performance gap between modern Class A product and second-generation industrial buildings. While Class A vacancy has steadily compressed from its 2024 peak, many Class B and C facilities are experiencing softer demand as tenants pursue operational efficiencies within newer assets.
Geographically, the strongest activity continues to occur along Charlotte’s outer logistics corridors, particularly within Cabarrus County, Gaston County, the Airport submarket and the I-85 corridor extending northeast toward Rowan County. These areas continue to attract institutional development due to access to interstate infrastructure, available land and labor accessibility.
The investment sales market also remains active despite elevated interest rates and capital market volatility. Institutional capital continues to pursue high-quality logistics assets with durable tenancy and long-term growth potential. Recent transactions involving Link, Walmart, Trinity Capital, Ferncroft Capital and Stonelake Capital demonstrate continued investor confidence in Charlotte’s long-term industrial story.
Looking ahead, Charlotte’s industrial market appears positioned for a healthier and more sustainable growth cycle. Population migration into the Carolinas, continued reshoring initiatives and long-term infrastructure investment should continue supporting industrial demand throughout the region.
While the market may no longer experience the extraordinary pace of expansion seen during the pandemic-era boom, Charlotte remains firmly positioned as one of the Southeast’s most resilient industrial hubs.
— By Abby Rights, senior vice president of Avison Young. This article was originally published in the June 2026 issue of Southeast Real Estate Business.