Industrial Space Demand Forecast, Third Quarter 2026

By: Hany Guirguis, Ph.D., Manhattan University and Joshua Harris, Ph.D., Fordham University

U.S. industrial net absorption in the first half of 2026 totaled 114.3 million square feet, a quarterly average of 57.1 million square feet that closely matches the 57.9 million-square-foot average quarterly pace recorded from 2023 through 2025, according to historical data provided by CoStar Group. Continued growth in consumer spending, e-commerce and capital expenditures is supporting moderate growth in demand for industrial space despite elevated interest rates and inflation due to the conflict with Iran. Given these trends, the Commercial Real Estate Development Association Industrial Space Demand Forecast projects 150.1 million square feet of net absorption across the U.S. in the second half of 2026 and 245.1 million square feet of absorption in 2027. This forecast assumes a resolution to the conflict with Iran and a return to normal trade and shipping activity in the near future. A more prolonged conflict could result in higher inflation and interest rates, limiting economic growth and demand for industrial space.

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