The Great Inventory Exodus: Why America’s Warehouses Felt ‘Empty’ in December
The holiday lights are packed away, the credit card bills are rolling in, and the supply chain, usually bustling with restocking efforts, is sounding a little… hollow. A new report confirms what many in logistics felt at the end of the year: America’s massive network of distribution centers experienced a profound emptying out in December.
Far from signaling a collapse in retail, this “empty warehouse” phenomenon is actually the culmination of a massive, year-long inventory correction. According to the Logistics Managers’ Index (LMI) for December 2025, inventory levels registered an “extreme contraction,” dropping to a reading of 35.1. The corresponding number for Warehousing Utilization—a measure of how full the buildings are—hit a second-consecutive all-time low at 42.9.
The Big Clean-Up
For the supply chain world, the story of 2025 was defined by an “unprecedented” glut of stored goods. Many companies had over-ordered in prior years to combat lingering post-pandemic delays, and this backlog of inventory sat waiting. December saw a final, decisive movement of these goods out of storage and onto store shelves or directly to consumers during the critical holiday season. Simply put, everything that had been stockpiled finally sold off.
This massive depletion wasn’t just about successful holiday sales; it was also a strategic play for many importers. Reports indicate a significant rush to move inventory downstream to avoid the full effect of new tariffs expected to hit incoming goods in early 2026. By selling off the old stock, businesses managed to clear the decks, but the full impact of these new trade policies—potentially leading to higher goods inflation—is still looming on the horizon as companies begin to restock.
More Space Than Ever Before
While the utilization of warehouse space was at a record low because the shelves were bare of goods, the actual vacancy rate for the buildings themselves also reached a critical point. The high-profile industrial real estate market, which saw a construction boom in recent years, is officially recalibrating.
The national vacancy rate for industrial space hit 9.7% at the end of November 2025, a substantial increase from the prior year. After a period of “panic-driven leasing” during the recent supply chain chaos, the market is shifting toward a much “healthier spot,” with a more balanced supply and demand dynamic that strongly favors tenants looking for a deal. Rent growth has also slowed to some of the lowest levels seen in over a decade.
So, the “empty warehouse” headline for December tells a dual story. First, retailers succeeded in clearing out a mountain of old inventory, providing a financial wave of relief. Second, it highlights the new reality in industrial real estate: after years of frantic building, there is more vacant square footage available than ever before, creating an opportunity for companies to redesign their logistics networks for a new, more measured era.
