Colliers in its latest research points to a U.S. industrial market that continues to stabilize after several years of adjustment, with demand now outpacing new supply, vacancy rates leveling off and developers delivering fewer new buildings.
In its second-quarter U.S. industrial report, Colliers said that the national industrial vacancy rate slipped 7 basis points in the second quarter to 7.3%, marking one of the first signs of stability after more than two years of steady increases in this figure.
But even with the slight decline, the U.S. industrial vacancy rate remains 4 basis points higher than were it stood during the second quarter a year ago. In good news for this sector, though, Colliers reported that vacancy rates either held steady or declined during the past year in 63% of the markets the firm tracks. This suggests that conditions are improving across much of the country in this key commercial sector.
Leasing demand also strengthened during the second quarter. Colliers reported that net absorption in the U.S. industrial sector reached 59 million square feet, nearly double the 27 million square feet recorded during the same quarter a year earlier and 17% higher than the first quarter of 2026. The South continued to lead the nation, accounting for roughly half of all net absorption with 29 million square feet.
At the same time, the flow of new industrial space continued to slow. Developers completed 53 million square feet during the quarter, the lowest quarterly delivery total since 2016, according to Colliers’ report. The slower pace of new supply has helped bring the market closer to balance after years of rapid construction.
While deliveries have eased, future development activity is picking up. Colliers reported that the national construction pipeline grew for the second consecutive quarter, increasing 7% to 312 million square feet, the highest level since the third quarter of 2024. The increase reflects both fewer project completions and a rise in new construction starts.
Rental rates also showed signs of stabilizing, according to Colliers. Warehouse and distribution asking rents averaged $10.34 per square foot during the second quarter, essentially unchanged from the previous quarter but down 1.6% from a year earlier. Colliers attributed the modest annual decline primarily to pricing corrections in several coastal markets that experienced unusually strong rent growth during the pandemic-driven industrial boom.
