KEY POINTS
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More than 305 million square feet of warehouse space was under construction across the U.S. in the second quarter 2026, up 18% from a year ago, and the second straight quarter of year-over-year growth.
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Industrial demand improved in the first half, with net absorption rising to 62.1 million square feet in the second quarter and vacancy edging down to 6.9%.
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Demand remains strongest in newer, large-format buildings, while ConstructConnect market data shows 2026 warehouse construction is also off to a modestly stronger start.
More than 305 million square feet of warehouse space were under construction across the U.S. in the second quarter, up 18% from 2025 and marking the second consecutive quarter of annual growth, according to Cushman & Wakefield.
The gain pushed the U.S. industrial construction pipeline above 300 million square feet for the first time in two years, suggesting that warehouse developers are regaining confidence after a prolonged slowdown in industrial real-estate demand.
Demand Rebounds in Newer, Larger Facilities
Cushman & Wakefield said net absorption, or the amount of newly occupied space minus vacated space, climbed 21% quarter over quarter to 62.1 million square feet in the second quarter. Year-to-date absorption reached 113.6 million square feet, the strongest first half since 2023.
The firm said demand remains concentrated in warehouses built since 2020 and in facilities larger than 500,000 square feet. Year-to-date net absorption in buildings completed since 2020 totaled 137 million square feet, with nearly half of that activity, or 62.4 million square feet, tied to large-format properties.
That concentration reflects what occupiers now want from industrial space: higher clear heights, more efficient layouts and greater power capacity to support AI-enabled operations and automation.
ConstructConnect Market Data Points to a Modest Upturn
Devin Bell, associate economist at ConstructConnect, reinforced the idea that warehouse construction is moving off its lows even if the sector has not fully recovered.
“Warehouse construction starts grew sharply during the pandemic, peaking at over $30 billion in 2022 amid low financing costs and booming e-commerce sales. Since then, activity has fallen 27.7% from 2022 to 2025."
Bell added, "2026 is off to an encouraging start after a few slow years, with warehouse construction up 4.3% year-to-date compared to January-May 2025. Activity remains well below 2022’s record levels, but the early signs in 2026 could point to a return to growth for warehouse construction.”
Vacancy Rate Shows Early Improvement
The national industrial vacancy rate fell 10 basis points to 6.9% in the second quarter, a sign that vacancy may have passed its cyclical peak as demand begins to outpace new supply.
Cushman & Wakefield also said the four-quarter rolling absorption total reached 236 million square feet, 17.3% above the 2023-2025 post-pandemic average of 201 million square feet.
Taken together, the figures suggest the industrial market is stabilizing, though activity remains selective and far from the rapid buildout seen earlier in the decade.
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