H1 2026 U.S. industrial market report

National net absorption as a percentage of inventory reached 0.2% in H1 2026 as tenant demand continued to strengthen. Many industrial markets that faced negative absorption during the supply-heavy conditions of 2024 have returned to positive territory, signaling improving market balance. With new development constrained and leasing activity accelerating, demand is increasingly absorbing available inventory across the country.

National vacancy declined at the end of the first half of 2026, marking the first drop in the post-COVID cycle. The decline reflects stronger demand, the absorption of vacant buildings, and a slowdown in new supply after nearly eight quarters of limited speculative development. As available space tightens, the market is beginning to tilt toward more landlord-favorable conditions.

After a prolonged pullback in development, the national construction pipeline expanded in Q2 2026, rising 12.0% above the average since Q4 2024. While development remains well below peak COVID-cycle levels, increased land acquisitions and rising tenant demand point to more groundbreakings ahead. As vacant new supply is absorbed, competition for modern industrial product is expected to intensify.

Industrial leasing volumes surged to start 2026, building on the momentum created in the second half of 2025. Leasing in the first half of the year exceeded the pre-COVID 10-year H1 average by 25.6%, the strongest first-half performance since 2022. Demand is expected to accelerate as manufacturers taking advantage of OBBBA incentives begin selecting sites and breaking ground.

More than $3.4 trillion in announced manufacturing projects continue moving through planning and development stages across the U.S. Supported by federal incentives, reshoring initiatives, and the newly enacted OBBBA provisions, these investments are expected to generate significant industrial demand from manufacturers, suppliers, logistics providers, and supporting industries. Markets located within major manufacturing corridors are likely to benefit most as new supply chains and distribution networks take shape.