U.S. industrial just posted its strongest leasing quarter since early 2024 as occupiers inked 146.2 MSF in Q3. Net absorption doubled to 38.2 MSF, tipping year-to-date take-up past 100 MSF—evidence that inventory normalization has given way to expansion. Developers nudged back in: the active pipeline rose to 246.8 MSF, the first uptick after twelve straight quarterly declines. Vacancy held near 7.6% and appears to be topping out, particularly in tight coastal nodes. Translation for pricing: concessions remain available in oversupplied interiors, but landlords in infill gateways are regaining leverage.

E-commerce and third-party logistics drove the quarter, accounting for a large share of big-box commitments as retailers staged for peak season. The reappearance of 1M+ SF “mega-deals” signals boardroom confidence in throughput and supply-chain reliability. In turn, larger footprints are locking in power, parking, and automation readiness as standard specs. Meanwhile, manufacturing-adjacent logistics continued to expand around onshoring programs, adding durable depth to demand. On balance, this is behavior—not sentiment. Leases were signed.

National vacancy ticked to 7.6%, but several hubs tightened as absorption outpaced deliveries. In Southern California, recent reads show IE West at 4.6% and IE Core 6.7%, reflecting the first real relief in new supply pipelines and healthy move-ins. By contrast, interior bulk markets with 2024 overbuilds still offer optionality, elongating downtime and keeping concessions in play. For now, underwriting must stay local: a 3–4% stabilized vacancy fits port-adjacent infill; 8–10% better matches oversupplied distribution metros. Ultimately, equilibrium is forming from the coasts inward.

The pipeline’s lift to 246.8 MSF is notable precisely because it followed a three-year deceleration. New starts are selective—build-to-suits and infill spec tied to ports, intermodal, and population centers. Lenders remain disciplined; life companies and banks prefer clear credit, while debt funds re-enter with measured leverage. As a result, the risk of a broad overbuild in 2026 looks contained. Still, watch the handful of metros where sub-5% vacancy plus strong pre-leasing could tempt faster spec waves. In practice, power capacity and trailer parking are gating items.

Rent growth has cooled to low single digits—healthy, sustainable, and negotiable. Landlords keep pricing power in land-constrained gateways; interior hubs are flatter as they digest 2023–2024 deliveries. Public and private signals rhyme: a leading warehouse REIT cited record quarterly signings and improved occupancy momentum, underscoring a turn in fundamentals. Cap rates for core long-lease assets remain ~5–6%, with 6–7%+ for lease-up or secondary risk; spreads should compress if vacancies drift down into 2026. For now, underwrite exits with a +50–75 bps cushion.

Peak-season flows will test this recovery. If holiday sell-through holds, expect a Q1 restock that sustains absorption into early 2026. Reshoring nodes (EV/battery corridors) should outperform as factory ecosystems demand adjacent logistics. Freight shifts—continued East/Gulf share gains—favor Savannah, Charleston, and Northern NJ. Developers: anticipate a measured spec restart by mid-2026 in metros where vacancy has stabilized and land bids have firmed. Operators: labor and automation remain the constraint set; designs with 36’+ clear, robust power, and trailer depth will clear first and price best. Investors: lean into tight-node, modern-spec product; rotate out of functionally obsolete stock.