September 2026 Industrial Report: E-Commerce Boosts Demand, Projects Larger Than 1 Million Square Feet Gain Ground in Construction Pipeline

Key Takeaways:

• The construction pipeline grew 32% year-over-year (Y-o-Y) from more than 338 million square feet in August 2025 to nearly 447 million square feet in August 2026.
• Year-to-date industrial sales reached nearly $60.5 billion, a 40% increase Y-o-Y
• The average leasing rate across top markets was up 5.4% year-over-year in August.
• Inland Empire, Calif., industrial rents grew by nearly 7% in a 12-month period.
• Columbus, Ohio, vacancies reach 7.5% following 600-basis-point (bps) year-over-year decrease.
• Year-to-date industrial sales volume in Tampa, Fla., doubles in August, hitting $1 billion.

Regional Highlights:

• Sale prices in Los Angeles went up 9% Y-o-Y to approach $300 per square foot.
• Indianapolis commands the highest regional premiums on new leases.
• Construction activity more than doubled year-over-year in Charlotte, N.C., and Baltimore.
• New Jersey topped year-to-date sales in the Northeast, while Boston commanded the highest average sale price per square foot in the region.

Trends & Industry News

Industrial Sector Moves Toward Balance From Oversupply

While market performance remains uneven geographically, the industrial real estate sector as a whole continues its transitional trend from the supply excess of the start of the pandemic to a more balanced phase.

Despite the various headwinds of recent years — such as the tariffs situation, economic uncertainty and the spike in energy prices — demand for industrial space has remained relatively solid, largely due to investment in supply chain resiliency and distribution networks.

As such, developers have continued to build new industrial space, although rising capital and construction costs have steered them toward a more disciplined approach. For instance, factors such as increasing vacancies and slowing rent growth have led to a pullback on speculative development. Granted, that pullback was perhaps inevitable after the 1.5 billion square feet of industrial construction starts between 2020 and 2022 that created the largest oversupply in the sector’s history.

While markets such as those tied to cross-border manufacturing or those where energy costs are most elevated are likely to face some of the greatest difficulties going forward, Sun Belt markets (like Dallas, Phoenix, Atlanta and Houston) have continued to perform well and sustain solid rent growth, as well as modest vacancy increases, despite experiencing historic waves of new supply.

“Faced with a number of potential disruptions and headwinds, the industrial market continues to be impressively resilient, as it enters a growth phase following the construction boom of the early 2020’s and the absorption lag that followed.”

Peter Kolaczynski, Director, Yardi Research

Rents & Occupancy

Seattle’s Excess Supply Affects Market Fundamentals

In-place rents for industrial space in the U.S. averaged $9.31 per square foot in August, which was $.06 higher than the previous month and 5.4% higher than a year prior.

Meanwhile, the national vacancy rate in August was 9.3% — on par with values recorded in the previous month and up 60 bps from August 2025.

Among the top markets analyzed for this report, Atlanta remained the leader in terms of in-place rent growth with 7.9% Y-o-Y here in August. Closely behind were New Jersey and Miami, each with a 12-month growth of 7.6%, as well as Dallas, where in-place rents for industrial space increased 7.5% during the same time period.

Notably, during the last two years, Seattle has seen rising vacancies and sluggish rent growth as the market contends with an abundance of supply. Yet, while the vacancy rate increased 500 bps Y-o-Y to reach 13.6% in August, in-place rents went up 4.5% in the previous 12 months.

In this case, Seattle developers have delivered a little more than 44 million square feet of new industrial space since 2020 (14.1% of stock), which will take some time to absorb. However, with only 1.1 million square feet breaking ground so far this year and just 1.2 million square feet currently in the planning stages, conditions seem ripe for increased absorption in the market.

Supply

Large Projects Gain Ground in Pipeline

Some 447 million square feet of industrial space was under construction nationally at the close of August, representing an estimated 2.1% of stock. And, as the industrial sector has become increasingly differentiated by size this year, the growing need for bulk logistics space has considerably strengthened the market for large facilities.

To that end, according to Yardi Matrix research data, 30 properties larger than 1 million square feet broke ground in 2024. During the first eight months of this year, that number was 49, which puts 2026 on pace for the highest number of million-plus-square-foot starts since 2022.

While continued e-commerce growth has been a major factor behind bulk developments, other segments — such as third-party logistics and manufacturing firms — have also driven demand, fueling an increased need for large facilities: Thus far in 2026, industrial real estate properties larger than 1 million square feet have accounted for more than 32% of all starts by square footage, which is the highest share for such facilities since 2020.

Transactions

Los Angeles Average Sale Price Approaches $300/Sq. Ft., Up 9% Y-o-Y

As of August, Yardi Matrix logged $60.5 billion in industrial transactions since the start of the year with properties changing hands at an average of $138 per square foot. Among the markets analyzed for this report, Los Angeles saw a significant bump in prices since last year. Specifically, the average sales price for industrial property in Los Angeles during the first eight months of the year was $297 per square foot, which marked an increase of nearly 9% from August 2025. Yet, it was still significantly below the all-time high of $320 per square foot recorded in the market in 2023.

 
What’s more, year-to-date industrial property sales in Los Angeles reached more than $2.64 billion in August with logistics and port activity driving a significant part of investment in the market.

The largest investment announced here so far this year is the sale of the historic CBS Studio Center (currently Radford Studio Center) in Studio City, Calif. Here, streaming giant Netflix has been shifting to owning, rather than leasing real estate, and has been especially ramping up its acquisition of studio lots. That’s in addition to developing a $1 billion production center in Fort Monmouth, N.J., that will spread across 292 acres and include 500,000 square feet of sound stages.

As part of this investment strategy, Netflix is under contract to purchase the foreclosed Radford Studio Center for $400 million — an offer that would be difficult to refuse, considering the property previously traded for $1.85 billion five years ago. Totaling about 55 acres with 1.2 million square feet of offices and studios, the deal works out to about $333 per square foot.

Western Markets

Inland Empire, Calif., Rents Grow by Nearly 7% in 12-Month Period

Sales for industrial spaces in Phoenix(opens in new tab) totaled $2.4 billion last month following an increase of 27% month-over-month (M-o-M) — the largest across the region — with an average price per square foot of $163. Noteworthy transactions included the sale of the 629,835-square-foot Park303 – Building A in Litchfield Park, Ariz., acquired by Nuveen Real Estate for $99.5 million, as well as a $76.7 million deal for a 2009-built warehouse in Tolleson, Ariz., previously owned by Nearon Enterprises.

Otherwise, on a year-over-year basis, California’s Bay Area stood out among Western markets with year-to-date sales volume hitting $1.8 billion following a 276% jump compared to August 2025.

While a string of completed projects shrank the total amount of industrial space under construction across most Western markets throughout August (most notably in Orange County, Calif.), pipelines in Seattle and California’s Central Valley continue their expansions. Namely, construction is ongoing at The Home Depot’s 645,834-square-foot warehouse and industrial space in Seattle(opens in new tab)’s Auburn suburb, while work on IDI Logistics’ Building 8 of its NorCal Logistics Center in Stockton, Calif. — which will add roughly 1.2 million square feet of new industrial space to the Central Valley market — is expected to be completed by next summer.

 
At the same time, rents in California’s Central Valley dipped by 110 bps M-o-M to reach $7.10 per square foot in August. Even so, across a 12-month period, leases grew by nearly 5% with premiums of $1.30 for new leases compared to in-place rents. Meanwhile, industrial leases across the Bay Area jumped 280 bps compared to the previous month to inch closer to rates in Los Angeles ($15.97 per square foot as of August). Finally, rents across the Inland Empire industrial market in California rose by 6.6% throughout a 12-month period.

Likewise, vacancy rates for Orange County industrial spaces(opens in new tab) in California (currently at 6.8%) experienced minimal movement compared to the previous month. However, on a year-over-year basis, there’s been a 140-bps decrease from the 8.2% industrial vacancies that the market recorded at this same time last year. By contrast, rates have gone up significantly for industrial spaces in Seattle(opens in new tab) — 500 bps Y-o-Y to reach 13.6% as of August — and Portland, Ore. (340 bps Y-o-Y to stand at 12.4%).

Midwestern Markets

Columbus, Ohio, Vacancies Come Down to 7.5% Following 600 bps Y-o-Y Decrease

Indianapolis has overtaken both Chicago and Cincinnati in terms of commanding the highest premiums on new leases across the Midwest. Compared to in-place rents, newly signed agreements are now roughly $1.20 more expensive per square foot with lease rates for industrial spaces in Indianapolis(opens in new tab) averaging $5.65 per square foot in August. Not to be outdone, industrial spaces in Detroit(opens in new tab) and Minnesota’s Twin Cities continue to be the most expensive options for this type of commercial real estate within the region with rents approaching the $8-per-square-foot mark.

In the same way, Columbus, Ohio, has been diligently reducing its industrial vacancies, managing to push it back from 13.5% to 7.5% following a 600-bps decrease year-over-year. Indianapolis has also managed a 570-bps reduction with a current rate of 5.5%. At the opposite end of the spectrum, Detroit vacancies went from 4.6% last year to 8.2% this August, marking a 360-bps jump.

 
Back in Ohio, deals for warehouse and industrial spaces in Cincinnati(opens in new tab) shot up by 148% M-o-M to reach $612 million in August with average pricing at $85 per square foot. Here, investment firms SparrowHawk and Almanac Realty Investors picked up two industrial properties in Cincinnati as part of a 20-building portfolio acquisition(opens in new tab) from former owner EQT.

Additionally, Indianapolis and Minnesota’s Twin Cities recorded significant increases in sales involving industrial assets on a month-by-month basis at 62% and 58%, respectively. Interestingly, two similarly named warehouses — the 208,906-square-foot 267 Industrial Park – Building 4 in Lebanon, Ind., and the 1.1-million-square-foot Park 267 in Zionsville, Ind. — changed hands for the same price ($137 million each). Further north, Pasadena, Calif.-based ExchangeRight bought a 750,000-square-foot property in Lakeville, Minn., from Scannell Properties in a deal worth $94.8 million.

Meanwhile, the total amount of Kansas City, Mo., industrial space(opens in new tab) under construction increased by 33.7% M-o-M to now stand at 4.4 million square feet. Here, the city council approved a final development plan for the 430,000-square-foot Ford Motor Stamping, a sizable addition to the market’s pipeline. And, in Chicago, under-construction totals reached 17 million square feet after climbing roughly 20% compared to the previous month. In the Windy City metro, two massive projects kicked off in August — Mohr Capital’s Project Midwest and Karis Cold’s facility in Montgomery, Ill. — and are set to expand Chicago’s pipeline by a combined 2.5 million square feet.

Southern Markets

Year-to-Date Industrial Sales Volume Doubles in Tampa, Fla., Reaching $1 Billion

Vacancies for industrial spaces in Memphis, Tenn.,(opens in new tab) fell by 130 bps M-o-M — the most pointed decrease within this period across the region. Currently at 10%, that places Memphis above the nationwide average rate, although it’s been trending downward fairly consistently, recording a 250-bps dip year-over-year. Next, staying in Tennessee, Nashville  recorded a more modest reduction month-over-month, but it also boasts a substantial year-over-year reduction (220 bps) to land at 5.7% — well below the national average vacancy rate in August.

Back in Florida, year-to-date sales for industrial spaces in Tampa(opens in new tab) doubled in the last month, going from $506 million to $1 billion with an average price of $142 per square foot. In this case, real estate investment platform TPG bought two assets in Lakeland, Fla., from DRA Advisors for a total of roughly $109 million. The sale is part of a larger, 53-building portfolio transaction(opens in new tab) that encompasses 5.4 million square feet of shallow-bay industrial buildings across Florida, Georgia, North Carolina, Tennessee, Minnesota, Illinois and Oregon.

Further up the coast, industrial transaction volumes in Charlotte, N.C., were boosted by the sale of North Charlotte Commerce Center – Building 1000 for $103.5 million, as well as Link Logistics’ acquisition of the 559,750-square-foot 12801 Jamesburg Drive building from Prologis in a deal worth $57 million.

 
Charlotte, N.C., and Baltimore also stood out for month-over-month increases in industrial construction activity. In Charlotte, the 1.57-million-square-foot Digital Charlotte Moores Chapel Road – Building 2 was a significant addition to the pipeline, which grew by 34.5% in August. Year-over-year, the expansion is roughly 129% — the highest across the region. Similarly, Baltimore industrial spaces(opens in new tab) under construction currently total 5.3 million square feet following a 20% M-o-M increase and 110% Y-o-Y expansion.

However, Nashville, Tenn., rents grew the most across Southern markets compared to the previous month, recording a 3.3% uptick and bringing average leases to $7.29 per square foot. Nashville also had the widest lease spreads in the region with premiums of up to $2.50 per square foot on new rent agreements. In the same way, renters looking for warehouse and industrial space in Dallas(opens in new tab) will also be paying a premium of $2.30 per square foot on new leases compared to in-place contracts.

Northeastern Markets

7.8 Million Square Feet of Industrial Space Under Construction in Philadelphia, Up 63% Y-o-Y

Boston’s pipeline increased roughly 16% from the previous month to inch closer to 3 million square feet following the inclusion of United Logistics Center – 38 & 40 United Drive in West Bridgewater, Mass. Industrial development is also advancing in Philadelphia as its under-construction square footage reached 7.9 million square feet in August on the back of an 18% hike. In particular, First Park New Castle – Building A (a 611,520-square-foot development by First Industrial Realty) is among the largest projects in the works.

That said, continued construction has deferred any meaningful reductions in Philadelphia’s industrial vacancy rates: Rates remained well above the national average, approaching 11% following a 50-bps M-o-M increase and a more significant 320-bps Y-o-Y hike.

 
Moreover, despite a 2.7% M-o-M increase, industrial spaces in Philadelphia(opens in new tab) command the lowest lease rates within the Northeast, averaging $9.29 per square foot (just below the national average of $9.31). For comparison, new industrial leases in Boston cost $3 more per square foot than in-place rents, while Bridgeport, Conn., premiums remain the steepest at $3.50 above average rates (per square foot) for leases signed within the last 12 months.

Regionally, Bridgeport, Conn., and New Jersey were the most active in terms of month-over-month industrial transactions. More precisely, year-to-date sales for industrial spaces in Bridgeport totaled $346 million on the back of a 26% increase.

At the same time, New Jersey recorded 20% growth in its sales compared to the previous month for a total of just more than $2 billion. With that, the average price per square foot came to about $182 — the second-most expensive in the Northeast — behind Boston ($222 per square foot). Here, CBRE Investment’s massive, $253 million deal for Link Logistics’ Building 8 at Exit 8A Distribution Center took the spotlight among sales for industrial assets across the Northeast in August.

Economic Indicators

E-commerce Reaches New Highs

Finally, according to data released by the U.S. Census Bureau, e-commerce sales totaled $340.2 billion in Q2 2026, which represented an increase of 3.8% compared to the first quarter and 12.2% Y-o-Y.

Additionally, e-commerce accounted for 20.2% of core retail sales in Q2, which marked an all-time high in terms of share of total retail. The second quarter was also the fifth consecutive quarter of online sales increasing as a share of retail and, although not by much, it was the first time since 2020 that this share exceeded 20%.

Of course, growth in online commerce is a positive sign of long-term demand for industrial real estate as online sales require an estimated three times more logistics space dollar-for-dollar than traditional brick-and-mortar retail.

Methodology

The monthly CommercialCafe national industrial real estate report considers data recorded throughout the course of 12 months and tracks top U.S. industrial markets with a focus on average rents; vacancies (including subleases, but excluding owner-occupied properties); deals closed; pipeline yield; forecasts; and the economic indicators most relevant to the performance of the industrial sector. Listing rate and occupancy information was based on Yardi Research data.

• Average Rents: Provided by Yardi Market Expert, a cutting-edge service that uses anonymized and aggregated data from other Yardi platforms to provide the most accurate rental and expense information available.

• Vacancy: The total square feet vacant in a market, including subleases, divided by the total square feet of industrial space in that market. Owner-occupied buildings are not included in vacancy calculations.

Stages of the supply pipeline: 

• Planned: Buildings that are currently in the process of acquiring zoning approval and permits, but have not yet begun construction.

• Under Construction: Buildings for which construction and excavation have begun.

Sales volume and price-per-square-foot calculations for portfolio transactions or those with unpublished dollar values are estimated using sales comps based on similar sales in the market and submarket; use type; location and asset ratings; sale date; and property size.

Year-to-date metrics and data include the time period between January 1 of the current year through the month prior to publishing the report.

Market boundaries in the CommercialCafe industrial report coincide with those defined by the CommercialCafe Markets Map(opens in new tab) and may differ from regional boundaries defined by other sources.

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