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The Industrial market experienced a significant decline at the start of 2026, as overall demand faded. In Q1 2026, net absorption fell to negative 554,857 sq. ft., a considerable shift of approximately 1.2 million sq. ft. from the 645,773 sq. ft. of positive absorption recorded in Q1 2025. It was also a sizeable reduction from the 106,003 sq. ft. reported in Q4 2025. This pullback contributed in increasing vacancy to 6.7%, up 20 basis points (bps) quarter-over-quarter (Q-o-Q) and 50 bps year-over-year (Y-o-Y). Availability also increased to 9.7%, 40 and 90 bps higher over the same comparisons. Pricing adjusted accordingly, with average asking rents declining 1.9% Q-o-Q and 4.6% Y-o-Y to $1.41 per sq. ft.
Construction activity continued to fluctuate in Q1 2026. While space under construction rose 8.4% from Q4 2025 to 946,266 sq. ft., it was down 42.0% from 1.6 million sq. ft. a year earlier. The number of projects underway also decreased from 44 to 11 over the same period. While Deliveries (125,076 sq. ft.) more than doubled the 61,999 sq. ft. completed in Q4 2025, it remained 52.1% lower than the 261,135 sq. ft. completed in Q1 2025. The combination of soft demand, higher vacancy and availability, and a sharply reduced pipeline highlighted a market still navigating existing space despite some moderation in new supply