The U.S. industrial market could reach a turning point in late 2027, CoStar reported. Vacancy is expected to rise slightly through the early part of next year before making a gradual descent, with demand beginning to outpace supply late in the year.
The national industrial vacancy rate remains in the mid-7% range entering the third quarter of 2026 and is expected to edge higher before beginning a steady decline. CoStar characterized this outlook as a modest improvement from the previous forecast, as stronger-than-expected demand in recent quarters has led to an upward revision in near-term net absorption and a slightly lower vacancy outlook.
“While leasing activity remains healthy, elevated availability and a lingering supply overhang are expected to keep rent growth modest in the near term,” said Juan Arias, national director of industrial analytics at CoStar Group. “By late 2027, slowing construction activity and improving demand should allow net absorption to exceed new supply, marking a turning point for market fundamentals.”
Average annual rent growth over the 2026-27 period has also been revised higher and is now forecasted at +1.9%.
The post U.S. Industrial Demand Could Exceed Supply by Late 2027 appeared first on Connect CRE.
