Industrial Absorption Hits 83M SF, the Strongest Quarter Since 2022

A demand rebound led by Texas and the Midwest is pulling industrial back into balance.

Nina Dale
November 11, 2026

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Industrial Absorption Hits 83M SF, the Strongest Quarter Since 2022

Good morning. The warehouse glut of the past two years is finally clearing, as tenants took more space than builders delivered for a second straight quarter. National vacancy slipped to 7.2%.

🎙️ This Week on No Cap: First Washington Realty CEO Alex Nyhan explains how his grocery-anchored portfolio abated less than 1% of rent through COVID, and why he won’t chase the highest-credit tenant for every box.

CRE Trivia 🧠

Which lakefront home of the Chicago Bears is officially a memorial to WWI war dead?

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Market Snapshot

S&P 500

GSPC

7,520.93

Pct Chg:
-0.38%

FTSE NAREIT

FNER

853.84

Pct Chg:
-0.043%

10Y Treasury

TNX

4.988%

Pct Chg:
+0.126%

CME Term SOFR

1-Month

3.92%

Pct Chg:
-0.00

*Data as of 11/10/2026 market close.

The Rebalancing

Industrial Absorption Hits 83M SF, the Strongest Quarter Since 2022

Warehouse demand came roaring back last quarter, outpacing a slowing construction pipeline and pulling the industrial market closer to balance after two years of oversupply.

By the numbers: According to Colliers, US tenants absorbed 83M SF in Q3, the most since 2022 and well above the 71M SF delivered. It was the second straight quarter demand topped supply, and vacancy slipped to 7.2%.

Texas and the Midwest lead: Dallas-Fort Worth absorbed 15.4M SF, followed by Chicago at 8.8M SF and Houston at 8.3M SF. The Midwest and South captured nearly 80% of national demand, with the Midwest the tightest region at 5.1% vacancy.

The pipeline thins: Space under construction reached 329M SF, up 19% YoY but still 54% below the 711M SF peak at the end of 2022. Over the past 12 months, deliveries of 261M SF only narrowly outran 255M SF of demand.

Rents find a floor: Warehouse and distribution asking rents averaged $10.43 per SF, slightly above a year earlier, as pricing stabilized after the supply-driven correction. Vacancy fell in 34 of Colliers' 79 markets, led by Columbus, Indianapolis and Memphis.

The AI tie-in: Tenants tied to data center construction, including makers of power, cooling and electrical gear, are a growing demand source. Still, higher rates and policy uncertainty are tempering business investment, keeping the recovery uneven across markets.

➥ THE TAKEAWAY

Supply discipline is paying off: With deliveries sliding and demand holding, landlords in the Midwest and South should regain pricing power first. Colliers expects absorption to keep meeting supply and vacancy to trend lower through 2027, though weaker metros will lag.

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✍️ Editor’s Picks

Data check: AI doesn't fix broken data, it amplifies it. Five warning signs reveal whether your CRE firm's foundation is ready for AI. (sponsored)
Servicing spike: CMBS special servicing hit 11.74% in October, a 13-year high, with hotels driving 37% of new transfers as the lodging rate jumped to 10.17%.
Return rebound: MetLife sees CRE total returns improving to 6.4% in 2027 from 5% this year, arguing values sit roughly 19% below their long-run inflation trend.
Crypto lull: Tokenized real estate has stalled with the Clarity Act stuck in the Senate, as one Miami developer booked just $15.7M of crypto-paid sales since early 2025.
Refi reckoning: Lenders are cutting margins on stabilized assets, but office and floating-rate apartment owners face a nearly $19B refinancing gap as extensions run out.

🏘️ Multifamily

Buy-America bind: A federal rule requiring fully US-made parts is stalling affordable projects, with one developer dropping $194,000 of solar panels it couldn't certify.
Bay bounce: Bay Area apartment rents rose about 9%, roughly seven times the national pace, as near-3% vacancy and thin construction pull life insurers back to lending.
Common ground: Housing affordability may be rare bipartisan turf in a split Congress, where roughly 1 in 5 incoming members is new and both parties ran on housing costs.
Renter recession: Even without a broad downturn, renters are feeling a recession of their own as stretched budgets and thin wage gains collide with still-high housing costs.
Boise boom: Boise has become one of the country's hottest rental markets, as rapid in-migration and a persistent housing shortage keep demand running ahead of new supply.

🏭 Industrial

Desert buy: Oxford Properties paid about $100M for a 460,000 SF, six-building light-industrial portfolio near Phoenix's Sky Harbor, lifting its metro footprint to 15 assets.
Storage reset: Self-storage is steadying after a supply glut, giving would-be operators a cooler entry point as deliveries slow and rents claw back from annual declines.

🏬 Retail

Mall divide: Top enclosed malls are raising rents and trimming tenant allowances, widening their lead over weaker centers where occupancy sits near 72% with little leasing leverage.
Default stack: Macerich defaulted on $399M across two malls, a $325M loan on Fresno Fashion Fair and a $74M loan on Niagara Falls' Fashion Outlets.
Holiday squeeze: Clothing, shoe and sporting-goods tenants head into the season with occupancy costs higher than in 2019, so a weak finish could strain rent coverage.

🏢 Office

Jobs cushion: Professional services added 70K jobs in a month, easing AI-displacement fears, as consulting, legal and accounting hiring offset losses at document-prep and call-center firms.
Medical cooldown: Los Angeles medical-office landlords are losing their edge as converted office towers add competition, cooling a niche that had outperformed the market's weak core.
Anchor risk: Weil's collapse spotlights $35.4B of CMBS backed by top law firms, with 27 buildings carrying $10.5B of debt maturing by the end of 2027.

🏨 Hospitality

Slow climb: San Francisco hotels have regained 85% of 2019 RevPAR, the weakest recovery among the 25 largest markets, with the city eyeing 72% occupancy in 2027.
Atlanta glut: A Hard Rock hotel is joining Atlanta's Centennial Yards even as new supply pushes metro occupancy to 62.2%, with 159 projects and nearly 18,000 rooms underway.
Club revival: Playboy is buying Miami Beach's Freehand Hotel for $12.5M to open its first members-only club since the late 1980s under an asset-light model.

📈 CHART OF THE DAY

South Atlantic apartment deliveries are forecast to jump 38% to more than 41,900 units in 2027, with Charlotte and Raleigh/Durham accounting for over 80% of the increase, intensifying regional supply pressures.