Philadelphia Industrial Figures Report Q1 2026

By Q1 2026, the market was absorbing space at a strong pace while still contending with elevated vacancy and the tail end of a large construction cycle. Net absorption rebounded to 2.4 million sq. ft., a swing of 2.6 million sq. ft. from Q4 2025’s modest contraction . This demand improvement trimmed vacancy by 20 basis points quarter over quarter to 11.0%, though it remained 160 basis points above Q1 2025, consistent with the substantial new supply added over the prior two years.

Development activity clearly pulled back. Space under construction fell 37.4% quarter over quarter and 77.7% year over year to 2.0 million sq. ft., following 19.7 million sq. ft. of deliveries over 2024–2025. Quarterly deliveries also slowed sharply, down 56.0% from the prior quarter to 1.6 million sq. ft. Despite higher vacancy, pricing held firm: average asking rents increased 0.2% over the quarter and 3.1% year over year to $12.69 per-sq.-ft., indicating that landlords largely maintained rate discipline while the market worked through the recent wave of new product.