2026 Industrial Gateway Market Overview: Rents, Concessions, and the Lease Expiration Wall

Key Takeaway: The national industrial rent index has been flat for eight straight quarters, but that headline number hides a market-by-market split. The Inland Empire is down 31.1% from its 2023 peak while Chicago just hit a new cycle high. Nearly a third of leased industrial SF across major markets rolls between Q3 2026 and Q2 2028, and where that space sits determines whether landlords are negotiating from strength or weakness. Data from CompStak’s 2026 Biannual Industrial Market Overview.

What does CompStak’s 2026 industrial data show?

Nationally, industrial rent growth looks flat. Underneath, markets are pulling in opposite directions. The Columbia CompStak Rent Index (CCRI) for industrial has oscillated between 12.03 and 12.61 since late 2023, per CompStak’s 2026 Biannual Industrial Market Overview — Part Two, and remains 69.7% above its Q1 2019 baseline. That flatness is an average, and averages hide divergence: some markets are still climbing, others are giving back years of gains.

Institutional owners and asset managers underwriting industrial portfolios in 2026 need the market-level breakdown, not the national average. A REIT with concentrated Inland Empire exposure is managing a different problem than one anchored in Dallas-Fort Worth or New Jersey, even if both report the same “flat” sector-wide trendline to their boards.

Which industrial markets are correcting, and which are holding?

The correction is concentrated in Southern California. The Inland Empire’s CCRI is down 31.1% from its peak and Los Angeles MSA is down 25.7%, both measured over 12 quarters, per CompStak’s 2026 Biannual Industrial Market Overview — Part One. Dallas-Fort Worth, by contrast, is off just 0.4% after five quarters of softening. New Jersey has given back only 3.8% despite an 85.6% run-up during the pandemic boom. Chicago has pushed to a new cycle high.

Peak-to-current numbers only tell half the story. Measured against the Q4 2019 baseline instead of the cycle peak, the Inland Empire is still up 149.9% and Los Angeles is up 94.3%. Both markets shed a large chunk of extraordinary gains. Neither gave back its full pandemic-era appreciation. That distinction matters for cap rate assumptions and hold-period underwriting: a 31% peak decline reads very differently against a 150% five-year run-up than it would against a flat baseline.

The Inland Empire numbers get specific. Starting rent peaked at $17.64/SF in Q2 2023 and has fallen 24.4% to $13.33/SF by Q2 2026, per CompStak’s CompStat lease-data report. Current in-place rent, the rent tenants already in the building are paying, kept climbing to $15.32/SF over the same window. That gap between falling starting rents and rising in-place rents is a mark-to-market signal: existing leases are still priced above where new deals are landing, which sets up rollover risk for owners whose Inland Empire leases expire in the next two years.

Source: CompStak’s 2026 Biannual Industrial Market Overview — Part One and Part Two, and the CompStat roundup. Data as of Q1 2026.

Where are concessions and mark-to-market spreads heading?

Free rent kept climbing even as rent growth flattened. Non-bulk industrial hit a cycle-high 4.5% of lease term in Q1 2026, and bulk edged to 4.8% of term, down only slightly from a 4.9% peak in Q4 2025, per CompStak’s 2026 Biannual Industrial Market Overview — Part Three. Landlords aren’t cutting face rents in most markets. They’re extending concessions to close deals, which compresses effective rent without moving the headline asking number.

Mark-to-market spreads, the gap between market rent and in-place rent, have narrowed on both sides of the size spectrum. Bulk spread stands at 2.5% in Q1 2026, down from a 4.7% peak in Q3 2024. Non-bulk spread sits at 1.4%, down from a 3.9% peak in Q4 2023. Bulk adjusted effective rent reached $10.66/SF in Q1 2026, up 0.9% year over year but 7.7% below its peak. Non-bulk effective rent was $12.67/SF, down 1.7% YoY and 7.9% off its high.

Two structural premiums held up despite the broader softening. Single-tenant net lease (STNL) space commanded a starting-rent premium above 5% for four straight quarters, reaching 5.6% in Q1 2026 ($11.46/SF STNL versus $10.85/SF non-STNL). Since Q1 2019, STNL rents grew 93.3% against 76.1% for non-STNL. Industrial outdoor storage (IOS) carries the widest spread of market rent over in-place rent in the sector at 29.8%, per CompStak, meaning IOS landlords are sitting on the largest unrealized repricing opportunity as those leases turn over.

Renewal economics for the largest tenants swung hard in both directions. The mega-format (500,000+ SF) renewal premium over the prior lease’s ending rent peaked at 147.2% in Q1 2023, compressed to 49.2% by Q2 2025, and rebounded to roughly 85.1% in Q1 2026. Landlords negotiating mega-box renewals today are working from a materially stronger position than they were a year ago.

Source: CompStak’s 2026 Biannual Industrial Market Overview — Part Two, Part Three, and Part Four. Data as of Q1 2026.

How exposed are portfolios to the industrial lease expiration wall?

The near-term rollover volume isn’t evenly distributed. Roughly 31% of leased industrial SF across major markets is scheduled to expire between Q3 2026 and Q2 2028, per CompStak’s 2026 Biannual Industrial Market Overview — Part Four. Greater Los Angeles holds more than a third of that volume on its own. Chicago Metro accounts for 15.4% and Atlanta 11.0%.

That expiration wall favors landlords in some markets and puts them on defense in others, depending entirely on where the leases sit. On expiring leases, New Jersey shows 35% upside for sub-200,000 SF space and 42% for larger space. Philadelphia shows 36% and 32%, respectively. Chicago’s upside narrows to 8%. Greater Los Angeles runs about 2% below in-place, meaning landlords there are more likely to be defending current rent than capturing a mark-up on renewal.

That’s the underwriting tension for 2026 and 2027: the market carrying the largest share of expiring square footage, Greater Los Angeles, is also the market where landlords have the least renewal-rent leverage. New Jersey and Philadelphia, with smaller expiration volumes but double-digit upside, present a more favorable rollover setup on a per-square-foot basis, even if the aggregate dollar opportunity is smaller.

Two additional shifts are reshaping deal composition heading into that wall. Average Class A industrial transaction size jumped 16.2% quarter over quarter to 209,672 SF in Q1 2026, 16.5% above the Q1 2019 baseline. At the same time, Small Bay’s share of total leased value hit a dataset peak of 40.7%, up 500 basis points from 2025, while Mega rose 650 basis points to 18.4%. The middle of the size distribution is losing share to both ends.

Lease terms tell a related story about tenant confidence. Large-format leases (200,000+ SF) averaged 80.2 months in Q1 2026, just below the 80.6-month pre-COVID baseline. Sub-200,000 SF deals settled at 59.7 months, now only 1.1 months below their Q1 2019 baseline after peaking at 66.3 months in Q2 2022. Tenants across size bands are committing to terms close to pre-pandemic norms, which suggests the sharpest phase of demand uncertainty has passed even as rent growth has stalled.

Source: CompStak’s 2026 Biannual Industrial Market Overview — Part Two and Part Four. Data as of Q1 2026.

Do REIT industrial portfolios perform differently than private owners?

CompStak’s portfolio scorecard, which weights six metrics by leased square footage on a 0–100 scale, shows FTSE Nareit Industrial landlords narrowly ahead of all other industrial owners, 52.2 versus 51.3. In-place rent is close between the two groups, $9.16/SF for Nareit Industrial tenants against $8.97/SF for all others, a gap of just 2.1%.

The separation shows up elsewhere. Nareit Industrial’s weighted average lease term (WALT) runs 51.8 months against 44.6 months for all other owners, giving REIT portfolios more cash-flow visibility into the expiration wall described above. Rent growth since 2019 also favors the index: Nareit Industrial starting rents are up 82.8% compared to 63.3% for all other landlords. REIT portfolios extend smaller concessions too, averaging 2.4 months of free rent and $3.15/SF in Work Value against 2.6 months and $4.65/SF industry-wide.

Both cohorts share the same dominant tenant exposure. Transportation, Warehousing, and Storage tenants make up 28.4% of Nareit Industrial’s leased SF and 24.0% of all other owners’ leased SF, tying portfolio performance for both groups to freight and logistics demand more than to any single market’s rent cycle.

Source: CompStak’s portfolio series: FTSE Nareit Industrial vs all other industrial owners. Data as of early 2026.

FAQ: Industrial Market Data for 2026

How much has industrial rent grown since 2019? The national industrial CCRI remains 69.7% above its Q1 2019 baseline as of Q1 2026, even though the index has been flat for eight consecutive quarters, per CompStak’s 2026 Biannual Industrial Market Overview.

Which industrial markets have corrected the most from peak? The Inland Empire is down 31.1% from peak and Los Angeles MSA is down 25.7% over 12 quarters. Both are still up well above their Q4 2019 baselines, at 149.9% and 94.3% respectively.

What percentage of industrial leases are expiring soon? Roughly 31% of leased industrial SF across major markets is scheduled to expire between Q3 2026 and Q2 2028, with Greater Los Angeles holding more than a third of that volume.

Do landlords have rent upside on expiring industrial leases? It varies sharply by market. New Jersey shows 35% to 42% upside and Philadelphia 32% to 36%, while Greater Los Angeles runs about 2% below in-place, meaning landlords there face renewal pressure rather than mark-up opportunity.

How do industrial concessions compare to a year ago? Free rent kept climbing: non-bulk hit a cycle-high 4.5% of term in Q1 2026 and bulk reached 4.8%, even as mark-to-market spreads compressed to 2.5% for bulk and 1.4% for non-bulk.

What premium does single-tenant net lease (STNL) industrial command? STNL starting rents carried a premium above 5% for four straight quarters, reaching 5.6% in Q1 2026, and have grown 93.3% since Q1 2019 versus 76.1% for non-STNL space.

Do REIT industrial landlords outperform private owners? Narrowly. CompStak’s portfolio scorecard puts FTSE Nareit Industrial landlords at 52.2 versus 51.3 for all other owners, with the largest gaps in WALT (51.8 vs 44.6 months) and rent growth since 2019 (82.8% vs 63.3%).

What does the mega-box renewal premium look like right now? The renewal premium for 500,000+ SF space peaked at 147.2% above the prior lease’s ending rent in Q1 2023, fell to 49.2% by Q2 2025, and rebounded to roughly 85.1% in Q1 2026.

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Rollover exposure, mark-to-market spreads, and concession trends look different in every industrial submarket CompStak tracks. Get started with CompStak to pull lease-level comps for the markets and size bands in your portfolio.

Data from CompStak’s proprietary database. Learn more at compstak.com.