CSGP · News · 20260805N

U.S. Industrial Demand Outlook

COSTAR GROUP, INC. · 2026-08-05 · Importance 22 · Surprise 32

CoStar forecasts the U.S. industrial vacancy rate to remain in the mid-7% range entering Q3 2026, rise modestly through early 2027, and then decline gradually. Average annual industrial rent growth for 2026–27 was revised upward to 1.9%, although supply overhang is expected to keep near-term growth modest. Slowing construction and improving demand are expected to allow net absorption to exceed new supply by late 2027, influencing leasing and development decisions.

Key facts

• CoStar forecasts U.S. industrial vacancy rates will rise slightly into early 2027 before declining, with the market anticipated to turn by late 2027 as construction slows and demand improves, allowing net absorption to outpace new supply. source
• CoStar expects the national U.S. industrial vacancy rate to remain in the mid-7% range entering the third quarter of 2026. source