US Industrial Leasing Posts Strongest First Half Since 2022

Industrial demand strengthened through the first half of 2026 as leasing activity and absorption both posted their strongest gains in several years. According to Savills’ preliminary Q2 2026 industrial report, leasing volume climbed 27.1% year over year to 490.6M SF, making it the third-strongest first half on record behind 2021 and 2022. Net absorption also increased 28% from the same period last year, reinforcing signs that occupier demand continues to improve despite elevated vacancy.

Large Format Leases Drive The Recovery

Industrial leasing has been gradually recovering after a period marked by slower tenant activity and rising vacancy. The latest figures suggest larger occupiers are once again driving market momentum. According to Savills, transactions exceeding 750,000 SF accounted for much of the first-half improvement, highlighting renewed confidence among major logistics, manufacturing, and distribution users. The rebound comes as developers continue to moderate new construction following the record pipeline that peaked in late 2022. That combination has started to bring supply and demand into closer balance.

The Details

Leasing totaled 490.6M SF during the first six months of 2026, while net absorption increased 28% from a year earlier, according to Savills. National industrial vacancy finished Q2 at 8.2%, unchanged from the previous quarter and only 10 basis points higher than one year earlier. Meanwhile, the active construction pipeline measured 320M SF, less than half the 782.4M SF underway at the end of 2022. Asking rents also remained relatively steady, rising just 1.8% year over year. One notable transaction included Pactra’s nearly 700,000 SF full-building lease at International Commerce Center in Adairsville, Georgia.

Supply Pipeline Continues To Normalize

The latest data points to a healthier balance between new supply and tenant demand than the market experienced over the past two years. Developers have pulled back considerably as financing costs remain elevated and vacancy sits above historical norms. At the same time, stronger leasing activity is helping absorb available inventory. Large users appear increasingly willing to commit to sizable facilities, particularly in modern logistics buildings that support expanding supply chains. That trend is helping stabilize vacancy even before the remaining construction pipeline fully delivers.

Why It Matters

The industrial sector appears to be moving from correction toward stabilization. Stronger leasing and absorption indicate occupiers remain active despite a slower economic backdrop. According to Savills, vacancy has stopped climbing on a quarterly basis even as new deliveries continue entering the market. Rent growth remains modest because available space and sublease inventory are still elevated, but slowing construction reduces the risk of additional oversupply. For owners and investors, improving demand alongside a shrinking pipeline provides a more constructive outlook than the market faced throughout much of 2024 and 2025.

What’s Next

The pace of large-format leasing will likely determine whether vacancy begins to decline during the second half of 2026. Savills expects rent growth to remain modest until excess availability is absorbed, particularly as sublease space continues to increase. Even so, the combination of stronger tenant demand and fewer projects under construction suggests industrial fundamentals are steadily improving. If absorption continues to outpace new deliveries, landlords could regain pricing power as the market moves into 2027.