U.S. Industrial Market Dynamics, Q1 2026

The industrial sector maintains a cautiously optimistic outlook despite escalating geopolitical tensions and rising oil prices that introduce near-term uncertainty. Trade policy volatility, potential tariff adjustments, and supply chain disruptions stemming from international conflicts have created a more complex decision-making environment for occupiers. 

• Industrial leasing continued to rally to begin 2026 with 145.2 million s.f. of leases executed with 71.6% of those being new leases.
• While Q1 historically underperforms other quarters, net absorption of 50.9 million s.f. demonstrated exceptional strength for the period. Performance was largely driven by ongoing flight-to-quality trends and tenant consolidation into more efficient facilities.
• Nationally, the vacancy rate held at 7.5% in Q1 but is expected to begin trending downward as existing supply continues to be absorbed and new construction starts remain relatively flat.
• Industrial development increases slightly at 2.2% year-over-year; bringing total industrial assets under construction to 259.5 million s.f.
• Asking rates remained modestly positive, growing by 0.8% year-over-year to $10.34 per square foot, as landlords balanced competitive pressures with the superior specifications of newer inventory.
• Big-box leasing (spaces of at least 500,000 s.f.) surged 80.7% year-over-year, signaling renewed confidence in long-term commitments and reversing the cautious approach that characterized the previous year.