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U.S. industrial market edges toward balance as demand outpaces supply
Industrial vacancy stabilized in Q2, while demand began exceeding new deliveries for the first time in several quarters.
U.S. industrial real estate showed early signs of stabilization in the second quarter of 2026, according to ConnectCRE, as demand started to outpace new deliveries while developers stayed more disciplined about adding supply.
The outlet said the national industrial vacancy rate stabilized in Q2 after rising steadily for several quarters, and it noted vacancy declined from its late 2024 peak as demand grew for larger warehouse and distribution facilities. At the same time, shallow-bay industrial vacancy increased modestly, though availability remained relatively tight versus historical levels.
ConnectCRE also reported that leasing activity expanded beyond pre-committed space, with tenants absorbing recently completed speculative projects faster than in prior periods. It said third-party logistics firms remained the largest source of industrial leasing in the first half of 2026, while leasing from general retailers and wholesalers declined as some companies continued outsourcing distribution to third parties.
Looking ahead, ConnectCRE pointed to a construction pipeline that has increased over the past year but with development activity described as less frantic than the prior boom cycle. It said developers have become more cautious about launching new projects due to elevated interest rates and rising material costs, and it expects the market to continue moving toward balance through the rest of 2026.