Industrial real estate under construction rose 18% in the second quarter, driven by demand from suppliers of data-center equipment. Warehouse developers are breaking ground on new buildings, betting that a yearslong slump in industrial real-estate demand is over.

More than 305 million square feet of warehouse space was under construction across the U.S. in the second quarter, up 18% from a year earlier and the second consecutive quarter of annual growth, according to real-estate services firm Cushman & Wakefield.

The rebound marks a sharp turnaround from previous quarters when high vacancy rates and economic uncertainty had stalled new projects. Developers now cite strong pre-leasing activity and limited available space in key logistics hubs as reasons to proceed.

While the data signals renewed confidence, analysts caution that the pace of construction could outstrip demand if data-center expansion slows or if broader economic conditions weaken.