U.S. industrial net absorption reached 104.6 million square feet in Q3 2026, the highest quarterly total since Q4 2022, CBRE Research reported October 23, 2026, with vacancy down 20 basis points year over year to 6.4% and average net asking rent up 3.6% to $11.16 per square foot.
Leasing ran 276.8 million square feet, up 27.1% year over year. Year-to-date absorption hit 237.8 million square feet, versus 97.7 million in the same stretch last year. Dallas-Fort Worth led that YTD list at 23.6 million square feet.
The recovery is real and uneven. Properties built from 2000 to 2019 took 13.9 million square feet of positive net absorption in Q3. Older stock still has a vacancy problem. First-generation space is tight in some markets and overhanging in others.
How Strong Was Q3 Absorption Versus History?
CBRE's own benchmarks leave little room to shrug.
104.6 million square feet of Q3 net absorption sits well above the 10-year quarterly average of 82.9 million. Completions in the quarter were 79.4 million square feet, so demand beat new supply by about 25 million square feet. NorthPeak Commercial Advisors, summarizing the same CBRE report (as seen in GlobeSt), said demand exceeded new supply for a second consecutive quarter.
Year-to-date absorption of 237.8 million square feet is more than double last year's 97.7 million. That is the number allocators will paste into investment committee decks. It is also why CBRE now expects annual industrial investment volume to rise 15% year over year to $130.7 billion, with average loan-to-value on permanent loans up to 60.5% in Q3 from 57.5% in Q2 and 59.6% a year earlier. Debt is following occupancy, not leading it.
Connect CRE placed CBRE in a pack with JLL, Colliers, Cushman & Wakefield, and Plante Moran Realpoint: most of the major shops described stronger occupier demand and easing vacancy in Q3. Cushman said inland markets accounted for roughly 80% of year-to-date absorption. Port markets moved too, but the interior did the heavy lifting. That is the map behind DFW, Houston, and Atlanta topping CBRE's absorption table.
Who Is Signing the Leases?
CBRE said Q3 leasing rose 27.1% to 276.8 million square feet, and year-to-date leasing rose 17.9% to 842.3 million. Leases of 700,000 square feet or more nearly doubled. Activity in smaller size ranges rose by an average of 9.7%. This is not a one-size rebound.
NorthPeak's read of the CBRE report named the 700,000-plus crowd: third-party logistics providers, manufacturers, and data center-related occupiers. Manufacturing accounted for about 14% of total leasing and jumped 69% year over year in that write-up. That occupier mix matches what Prologis heard in its Harris Poll: networks, power, and inventory positioning, not just cheap bulk.
Connect CRE added that Cushman & Wakefield put manufacturers at more than one-quarter of its year-to-date leasing volume, up from just under one-quarter over the prior three years, and that JLL saw more tenants expanding in place because large blocks are scarce. The big-box bid is back. So is the in-place expansion bid. Relocations are harder when the block you want is already taken.
That is why CTP just agreed to pay about $500 million for Ares's SLP Vietnam platform. China Plus One manufacturing and express logistics are leasing Grade A wherever the factory and the parcel network go. The U.S. tape is the domestic half of the same occupier.
Why Is Vacancy Falling If the Pipeline Is Growing?
Vacancy 6.4%, -20 bps year over year. Availability 8.9%, -30 bps. CBRE's explanation is blunt: stronger demand and fewer new deliveries, even as some markets still digest speculative completions.
Q3 completions of 79.4 million square feet were down slightly year over year but up sharply from 47.3 million in Q2. Year-to-date deliveries of 182.7 million square feet were 17% below the same point last year. That gap is how absorption outran supply.
The next sentence is the warning. Space under construction rose 9.3% year over year to 278 million square feet. The pipeline is turning back up while current deliveries are still below last year. Dallas-Fort Worth holds 34.4 million square feet of that pipeline. Phoenix holds 20.5 million. Houston holds 18.4 million. Those three metros will decide whether Q3's 104.6 million was a clearing event or a head start before the next wave.
CBRE also split vintages. Limited first-generation availability and increased renewal incentives are supporting existing facilities. Vacancies in older properties remain a challenge. Yet 2000-2019 buildings still posted 13.9 million square feet of positive net absorption. The market is not treating every warehouse as equivalent. Functional 15-to-25-year-old product is participating. Obsolete shells are not.
Which Markets Are Doing the Heavy Lifting?
CBRE's YTD absorption leaders:
| Market | YTD net absorption | Under construction |
|---|---|---|
| Dallas-Fort Worth | 23.6 million SF | 34.4 million SF |
| Houston | 18.1 million SF | 18.4 million SF |
| Atlanta | 13.6 million SF | n/a in national top-3 pipeline |
| Phoenix (pipeline) | n/a in national top-3 absorption | 20.5 million SF |
Growth rate (YTD absorption divided by existing inventory) tells a different story. El Paso (3.3%) and California's Central Valley (3.1%) led. Cincinnati, Houston, and Savannah followed at 2.9% each. CBRE tied that list to logistics hubs plus manufacturing and cross-border trade.
Laura Hyde, managing director of investments at Link Logistics, said the quiet part about two of those demand markets when Link bought Oxford's Gateway assets in September:
Dallas-Fort Worth and Atlanta continue to see strong logistics demand as population growth and business investment support durable industrial fundamentals.
That quote is why DFW can lead absorption and lead the pipeline at the same time. Builders are not blind. They are chasing the same rooftops. Oxford recycling $400 million out of Atlanta and Dallas into Phoenix infill is the capital-markets twin: sell where the business plan is done, buy where the team can still mark rents, and ignore Phoenix's 20.5 million-square-foot pipeline only if you are buying leased airport product, not spec.
Coastal contrast sits in BKM and Kayne's $1.8 billion Southern California light industrial purchase. Darla Longo, CBRE vice chair, told Bisnow:
Capital's belief is that Southern California is on sale, and candidly, it is.
Inland absorption and coastal basis resets can run in the same quarter. CBRE's national 6.4% vacancy averages those two tapes. Do not underwrite Los Angeles as if it were Alliance.
What Does Modest Rent Growth Mean for Owners?
$11.16 per square foot, +3.6% year over year, is positive and not a boom. CBRE said vacancy in some markets continued to limit pricing power. Connect CRE noted JLL calling rent growth the fastest since 2024, Cushman seeing a third straight quarter of acceleration, double-digit gains in Dallas-Fort Worth and several Southern and Midwestern markets, and softer growth in California, New Jersey, and Miami. National asking rent is a blend.
For owners, +3.6% plus 104.6 million square feet of absorption is permission to stop cutting as a default. It is not permission to forget concessions on older product. CBRE's renewal-incentive comment is the tell: first-generation scarcity is keeping existing buildings in play, but landlords are paying to keep them.
Capital is already treating the print as a green light. CBRE's $130.7 billion full-year investment forecast (+15%) and 60.5% LTV sit next to Oxford's matched $400 million recycle and BKM-Kayne's $1.8 billion SoCal bid. Occupancy healed first. Checks are following. Prologis is still building infill where power and rooftops align rather than waiting for national rent to look like 2022.
The Numbers Worth Writing Down
- Q3 net absorption: 104.6 million SF (highest since Q4 2022)
- 10-year quarterly average: 82.9 million SF
- YTD absorption: 237.8 million SF (vs 97.7 million last year)
- Q3 leasing: 276.8 million SF (+27.1% YoY); YTD 842.3 million (+17.9%)
- Vacancy / availability: 6.4% (-20 bps YoY) / 8.9% (-30 bps)
- Asking rent: $11.16/SF (+3.6% YoY)
- Q3 completions: 79.4 million SF; YTD 182.7 million (-17%)
- Under construction: 278 million SF (+9.3% YoY)
- DFW YTD absorption / pipeline: 23.6 million / 34.4 million SF
- Investment volume forecast: $130.7 billion (+15%)
Demand Is Back. Selection Is the Job.
104.6 million square feet is the headline that ends the 2025 hangover narrative. 6.4% vacancy and $11.16 rents are the fine print: the sector is healing, not scarcity-pricing. 278 million square feet under construction, led by DFW, Phoenix, and Houston, is the test for 2027.
Buy functional infill with in-place income, the way Oxford just did in Tempe and Airport. Buy corrected coastal basis if the fund clock is real, the way BKM and Kayne did. Build where occupiers and electrons already exist, the way Prologis is doing in Joliet. Do not average those three strategies into one national cap rate.
CBRE just told you demand returned. The pipeline will tell you whether it stays.
Sources
- Q3 2026 U.S. Industrial & Logistics Market Report, CBRE Research, October 23, 2026
- Industrial Demand Hits Strongest Quarter Since 2022 as Large Leases Surge, NorthPeak Commercial Advisors (as seen in GlobeSt)
- Industrial Demand Accelerates in Q3, MHL News, October 30, 2026
- Q3 2026 Industrial Market: Demand Hits Highs as Vacancy Eases, Connect CRE
- Link Logistics Acquires Infill Industrial Portfolio in Dallas-Fort Worth and Atlanta, Link Logistics, September 17, 2026