U.S. industrial vacancy falls below 7% in Q2

What's happening

The national industrial vacancy rate fell to 6.9% in the second quarter of 2026, according to Cushman & Wakefield, as net absorption reached 62.1 million square feet and leasing volume hit 193.4 million square feet, the highest since mid-2022. New supply is easing: first-half deliveries of 119 million square feet were nearly 20% below the prior year.

The construction pipeline is rebuilding, however, with 305 million square feet underway, up 18% year over year.

• Vacancy: 6.9% nationally.
• Net absorption: 62.1 msf in Q2; 236 msf over four quarters.
• Deliveries: 119 msf in the first half, down nearly 20%.
• Under construction: 305 msf, up 18%.
• Inland Empire: 28.5 msf leased year to date, second only to Dallas–Fort Worth.

What it means for owners, tenants and investors

Tenants that had leverage during the 2024–2025 vacancy climb should expect firmer negotiations on concessions and free rent, especially for modern space. Owners with near-term vacancies are better positioned than a year ago. Southern California stands out: the Inland Empire's leasing ranks second nationally, a sign that regional distribution demand has returned after a slow stretch.

Owners planning dispositions should note that buyers are pricing in continued improvement in occupancy. Tenants with renewals in the next 12 to 18 months may benefit from starting discussions early, before availability tightens further in their submarket.

Vacancy appears to have peaked, and leasing momentum is back at 2022 levels.

What to watch

The rising construction pipeline could cap the recovery in 2027; track starts and preleasing in the Inland Empire.

Photo: Jacques Dillies / Unsplash.