For the first time in 15 years, rent growth for logistics properties turned negative in 2024, slipping by 7% in the U.S. and Canada, according to a new report from Prologis.

The decline of the two North American regions was steeper than the 5% drop experienced globally and the 1% dip seen in Europe. Even so, market rents in the U.S. ended up 59% higher in 2024 than they were in 2019, meaning that logistics leases are still likely to see a significant increase in 2025.

One reason for the slower rate of growth of net effective rents was excess supply in specific markets like Phoenix as lease-up times lengthened, Prologis said. “Concessions, such as free rent, trended back toward prepandemic norms in the U.S. and Europe.” Globally, the only two U.S. markets where rents grew were Nashville and Houston.