U.S. industrial vacancy is projected to rise modestly in 2026 even as demand is expected to increase somewhat from 2025 levels, while average annual rent growth is expected to remain steady, according to a revised forecast from CoStar. The national vacancy rate is projected to increase from its current level of 7.5% to 7.8% by Dec. 31 before declining through 2027.
Average annual rent growth over the 2026-27 period is forecasted at +2.2%, in line with previous expectations. An inflection in the vacancy trend by the end of 2026 is expected to push annual rent growth higher to +2.8% by the end of 2027, still falling short of 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 8-9%, 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.”
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