New leasing volume rose to 263.4 million square feet (MSF) year-to-date, up 12.3% from a year earlier, while net absorption reached 53.9 MSF and exceeded 45.3 MSF of deliveries. That shift helped bring the national vacancy rate down to 7.5%, marking the first quarterly decline since 2022, according to Newmark’s 1Q26 U.S. Industrial Market Conditions & Trends report.
“The report also points to a market that is becoming more selective. Large-format space is leading the recovery, newer buildings are absorbing demand more quickly than older stock and capital markets activity is picking up, especially for these newer, larger assets,” according to the report.
Key takeaways:
· At the same time, asking rents edged higher, averaging $10.62 per square foot, while the construction pipeline stood at 309.8 MSF and new starts slowed to 53.0 MSF.
- Net absorption reached 53.9 MSF, topping 45.3 MSF of deliveries and helping vacancy move lower.
- Megabox properties of 700,000 square feet and larger recorded the strongest leasing gains, and 72% of megabox pipeline space is already preleased or owner-developed.
- Positive absorption in the quarter was concentrated in buildings delivered since 2020, while older space is taking longer to lease.
- Average direct asking rent rose to $10.62 per square foot, up 4.2% year over year.
- Industrial sales volume reached $31 billion year to date, up 48% year over year, with owner-users contributing at a higher share than average.
