2026 Biannual Industrial Market Overview: Part Two

The industrial market’s headline rent index has been flat for eight straight quarters, but that stability is hiding a split. Mega-format lease renewal premiums just rebounded from 49.2% to 83.7% in a year, while coastal markets like the Inland Empire and Los Angeles keep correcting and Chicago and Dallas-Fort Worth sit at or near cycle highs. Check out the full insights in the 2026 Biannual Industrial Market Report.

Supply Chain Pressure and Warehouse Tightening Signal a More Constrained Second Half for Occupiers

The Global Supply Chain Pressure Index registered 1.8 in both April and May 2026, its highest level since July 2022, though still well below pandemic levels. After spending most of February 2023 through November 2025 in negative territory, the index crossed back into positive ground at 0.6 in December 2025 before jumping 1.1 points in April, driven by lengthening delivery times and growing order backlogs. The back-to-back reading at 1.8 suggests pressure may have stabilized at an elevated level rather than continuing to spike.

Warehousing Capacity and Utilization have maintained a divergent pattern through May 2026 in the Logistics Managers’ Index. After contracting through much of early 2026, capacity ticked back to mild expansion at 50.5 in May. Warehousing Utilization held at 62.9, preserving a 12.4-point spread between the two series. The recovery in capacity was uneven across the supply chain: upstream firms reported continued contraction at 44.3, while downstream firms reported expansion at 60.9.

Leaner Inventories and a Decelerating Construction Pipeline Point to Tightening Conditions Ahead

The retail inventories-to-sales ratio declined from a peak of 1.33 in August 2024 to 1.26 in March 2026, a 5.3% drop and its lowest reading since mid-2023. Retailers are carrying leaner inventory positions relative to sales, a condition that historically precedes restocking cycles and associated demand for distribution and warehouse space.
Commercial construction spending, which includes warehouses and distribution buildings, peaked at $155.4 billion in September 2023 and has fallen approximately 21% through April 2026 to $122.3 billion. Manufacturing construction spending, driven largely by semiconductor and clean-energy facility investment, followed a similar arc, peaking at $240.1 billion in August 2024 before declining 22.7% through April 2026. Both series remain well above pre-pandemic levels, meaning new supply continues entering the market, but the sustained deceleration in construction spending points to a moderating pipeline and potential tightening in supply.

The National Industrial CCRI Has Plateaued for Eight Consecutive Quarters

The Columbia CompStak Rent Index (CCRI) for national industrial leases has trended in a narrow band since late 2023, oscillating between 12.03 and 12.61 across eight consecutive quarters. The index peaked at 12.61 in Q4 2024, pulled back to 12.03 in Q1 2025, recovered through Q4 2025, and has since declined to 12.08 in Q1 2026, just 4.2% below that peak. Year-over-year, the index is up 0.4%, which is effectively flat.

The pattern does not suggest a deepening correction. Quality-adjusted industrial rents appear to have reached a ceiling rather than entered a sustained decline, with repeated attempts to breach the 12.5 level followed by modest pullbacks. The index remains 69.7% above its Q1 2019 baseline, indicating that the structural rent gains of the post-COVID cycle remain largely intact despite the absence of further appreciation.

West Coast CCRI Values Have Retreated Sharply from Peak; Chicago and Dallas Remain Within Striking Distance of Cycle Highs

By a quality-adjusted measure, West Coast markets have posted the steepest declines from peak: the Inland Empire and Los Angeles MSA are down by 31.1% and 25.7%, respectively, and are both 12 quarters removed from their respective peaks. These are not shallow pullbacks. The Inland Empire ran up 149.9% above its fourth-quarter 2019 level before receding; Los Angeles climbed 94.3% over the same baseline. Quality-adjusted rents in both markets remain well above pre-pandemic levels, but the repricing since peak has been most severe among major markets analyzed.

Chicago’s CCRI sits at a new cycle high with no measurable decline, while Dallas-Fort Worth is off just 0.4% after five quarters. New Jersey has declined 3.8% over nine quarters despite an 85.6% run-up, and Philadelphia has retraced 1.3%. Phoenix and Houston peaked just one quarter ago and are each down under 10%, suggesting those markets may be in the early stages of repricing.

Mega Posts Largest Share Gain of Any Size Segment of Total Value in 2026, While IOS Holds Highest Repricing Potential

Leases of the mega-size segment posted the largest single-period share gain among size-based segments in 2026, rising 650 basis points from 11.9% to 18.4% of total industrial lease value, approaching levels last seen in 2024. Small Bay simultaneously reached its dataset peak at 40.7%, up 500 basis points from 2025. Both gains came primarily at the expense of Mid-Size, which fell from a 2025 peak of 36.0% to 29.7%, its steepest single-period decline in the dataset. The pattern suggests tenant demand is gravitating toward the size extremes of the industrial spectrum rather than the middle.

On repricing potential, IOS holds the widest spread of market rent over in-place rent at 29.8%, well ahead of all other subsectors. Among size-based segments, Mega leads at 11.4%, ahead of Large at 10.0% and Mid-Size at 8.7%. Small Bay’s spread of 1.4% indicates that in-place rents there are more closely aligned with current market rates.

Check out the full 2026 Biannual Industrial Market Report.