**U.S. Industrial Sector Poised for Modest Vacancy Increase in 2026**
The U.S. industrial real estate market is expected to see a slight uptick in vacancy rates in 2026, despite a projected increase in demand over 2025 levels, according to an updated forecast from CoStar Group.
The national industrial vacancy rate, which currently stands at 7.5%, is projected to rise to 7.8% by the end of 2026. Following this increase, the rate is expected to decline through 2027, signaling a potential shift in the trend.
Average annual rent growth for industrial properties is forecasted to remain steady at 2.2% during the 2026–2027 period. By the end of 2027, annual rent growth is anticipated to reach 2.8%, although this remains below the pre-pandemic five-year average.
“Risks to the forecast remain tilted to the downside,” said Juan Arias, national director of industrial analytics at CoStar Group. “If tariffs between the U.S. and other trade partners increase or remain elevated for a prolonged period, or if consumer spending on goods weakens further, the industrial vacancy rate could reach 8 to 9%, resulting in a more significant drag on national industrial rents. Conversely, if inflation eases and consumer confidence rebounds, absorption and rent growth across industrial properties could outperform expectations.”
Despite medium-term uncertainty, the U.S. industrial market remains resilient, with key indicators pointing toward eventual recovery and tenant demand rebounding as broader economic conditions improve.
