The U.S. industrial market continued to strengthen in the second quarter of 2026 as demand and supply were in balance, pushing the national vacancy rate below 7% while leasing activity reached its highest level since mid-2022, according to Cushman & Wakefield's (NYSE:CWK) latest report.

Net absorption totaled 62.1 million square feet (msf) during the quarter, marking the second time in the past three quarters that quarterly demand exceeded 60 msf. Year-to-date, occupiers have absorbed 113.6 msf of industrial space, the strongest first-half performance since 2023. Over the past four quarters, net absorption reached 236 msf, more than 17% above the post-pandemic three-year average.

At the same time, industrial vacancy declined to 6.9% as new deliveries remained relatively modest. Developers completed 62 msf of new space during the second quarter, bringing first half deliveries to 119 msf, nearly 20% below the same period last year.

"After several quarters of market recalibration, the U.S. industrial sector is entering a new phase characterized by healthier fundamentals and more balanced growth," said Jason Tolliver, President, Logistics & Industrial Americas, at Cushman & Wakefield. "Occupier demand continues to build while development has become much more disciplined than it was during the peak construction cycle. That combination is beginning to tighten market conditions once again, particularly for newer, high-quality logistics facilities."

Demand continued to concentrate in modern industrial properties as occupiers prioritized higher clear heights, greater operational efficiency and increased power capacity to support automation. Warehouses completed since 2020 accounted for 137 msf of net absorption during the first half of the year, with facilities larger than 500,000 sf representing nearly half of that total.

Leasing activity remained resilient despite longer decision-making timelines. New leasing volume reached 193.4 msf during the second quarter, the highest quarterly total since mid-2022. Year-to-date leasing activity is up 16% from a year ago and stands at its highest level in four years, supported by continued demand for large-format distribution facilities.

Nine markets have each recorded more than 10 msf of leasing activity so far this year, led by Dallas/Fort Worth with 40.3 million square feet, followed by the Inland Empire with 28.5 msf and Chicago with 21.8 msf.

Although construction activity continued to recover modestly, the development pipeline remains well below the historic highs reached during the post-pandemic expansion. Approximately 305 msf of industrial product is currently under construction, representing the fourth consecutive quarterly increase and an 18% year-over-year gain. Even so, the pipeline remains significantly below its peak, underscoring the more measured pace of speculative development. Six markets now have more than 10 msf under development, up from four markets one year ago.

Looking ahead, Cushman & Wakefield expects industrial fundamentals to continue improving through the second half of the year as steady occupier demand combines with a disciplined pace of new development.

"Fundamental demand drivers, including e-commerce, onshoring, nearshoring and ongoing supply chain optimization continue to support occupier activity," said Jason Price, Cushman & Wakefield’s head of Logistics & Industrial Research Americas. "While macroeconomic uncertainty remains, tenants are continuing to prioritize cost efficiency and network resilience. With new supply remaining relatively disciplined, we expect vacancy to continue trending lower through the balance of the year, led by modern logistics product and large-format distribution facilities."

About Cushman & Wakefield

Cushman & Wakefield (NYSE:CWK) is a leading global commercial real estate services firm for occupiers and investors with approximately 53,000 employees in over 350 offices and nearly 60 countries. In 2025, the firm reported revenue of $10.3 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.

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