Why warehouse space is getting harder and more expensive to come by

It’s somehow November and businesses across the U.S. are frantically getting ready for the holidays. So much so, it turns out, that warehouse space is getting harder and more expensive to come by.

Picture it: America, early 2026. Businesses everywhere thinking about ordering stuff for the holidays, because it takes forever to get anything. They knew they had to do it, but this year, they didn’t want to.

“You don’t want to bring in inventory early where it’s going to be more expensive because of tariffs,” said Zac Rogers, professor of supply chain management at Colorado State University.

Tariffs! If you thought we were done with those, think again. Businesses don’t want expensive goods sitting on the shelves for months before they can make money off it.

“So the idea is, yes, we will pay these tariffs, but let’s pay them at the last second before we sell whatever these goods are,” Rogers said.

In other words, businesses were already procrastinating. And then, the U.S. and Israel started a war with Iran. So businesses decided they had literally no idea how consumers would be feeling by Christmas.

Solution: more procrastination.

“They were waiting to see if the consumer would show up,” Rogers said.

Well, consumers, somehow, are showing up. They’re expected to spend about $275.1 billion over the holiday season, according to Adobe’s shopping forecast.

“That 6.7% year-on-year growth is in line with what we’ve seen in, kind of, previous holiday seasons,” said Vivek Pandya, lead insights analyst for Adobe.

So with all of this in mind, U.S. businesses put in those orders, all at the last minute, all at once.

“Bringing in all this expensive inventory in at the last second has really hit the warehousing market square in the eyes,” Rogers said.

The Logistics Managers’ Index Report, which Rogers helped put together, shows inventory growth this month was the highest since 2022. Warehouses are running out of space, and the price of storing stuff in those warehouses also had its fastest growth since 2022.

Nada Sanders, professor of supply chain management at Northeastern University, said all these cram-packed warehouses are a risk for businesses.

“The danger is they could end up getting stuck with excess inventory,” she said, that they can’t sell during the holidays.

So everyone’s betting on the consumer here — and they better be right.