Snapshot of Industrial Market for Q1

The industrial market, which is showing signs of stabilization, as supply and demand come back into balance after several years of rapid expansion, according to a recent report on the QI industrial market statistics from Colliers.

While vacancy has edged up, fundamentals remain healthy as construction slows and tenant demand continues across most markets. 

Key Takeaways

Demand Strength Across Markets: Demand remains broad-based, with ~70% of U.S. markets posting positive absorption.

Vacancy Stabilization: U.S. industrial vacancy held at 7.4% in Q1 2026, up modestly year-over-year but stabilizing after sharp increases in 2023–2024. Limited new supply and steady occupier demand are expected to push vacancy modestly lower later this year, particularly in more balanced markets.

All areas across the country were up as follows: South (8.4%), Northeast (8.3%), West (7.8%), and Midwest (5.4%).

Supply-Demand Rebalancing: New supply and absorption are rebalancing, with 57M SF delivered and 43M SF absorbed in Q1, marking the lowest quarterly deliveries since 2019.

The South accounted for 65% of this demand (28M SF), with markets such as Atlanta, Dallas-Fort Worth, Houston, and Charleston each exceeding 3M SF of net absorption for the quarter.

Demand was positive in nearly 70% of US markets in Q1, a trend expected to continue through the rest of the year.

Construction Activity Bottoming Out: Construction activity appears to have bottomed out, with 286M SF underway and developers increasingly focused on build-to-suit as speculative development moderates.

Construction starts are expected to remain steady over the next few quarters, leading to a gradual increase in the industrial construction pipeline. 

Activity is up per year-over-year, led by Dallas-Fort Worth (34M SF) and Houston (24M SF).

Rent Growth Plateau: Rents have flattened at $10.46/SF on average, with declines in some coastal markets and continued resilience in tighter inland markets.

Rents are expected to stabilize in most markets through the remainder of 2026, though a gradual gain may emerge in those with the tightest vacancy.

Lease rates in major markets are as follows:

Inland Empire -- $12. 17 down 7% year-over-year

New York City Metro -- $17.06  no change 

San Francisco Bay Area -- $14.53, down 2%

Philadelphia  -- $11.08, no change

Houston -- $10.24 -- up 14%  

Dallas-Fort Worth -- $9.96  up 5%

Atlanta -- $8.07  down 5%

Chicago -- $8.47  up 5%

Detroit -- 7.43  up 4%