Q1 2026 INDUSTRIAL MARKET UPDATE

Written by: Stephanie Morris

Stephanie specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial and Retail groups. She is responsible for executing data reports, maintaining a commercial property database, reporting quarterly trends, performing data analysis and utilizing statistical information to predict future behavior in the market. Keep reading for her take on market trends in the Columbus industrial sector.

Industrial Market Update

The Columbus industrial market is rebalancing as strong demand continues to absorb supply. Modern bulk vacancy has compressed rapidly, leaving few large-block options for big-box tenants. With limited new development underway, the market is becoming increasingly supply constrained.

Market Trends

• The Columbus industrial market recorded 4.1 million square feet of positive absorption in the first quarter, reducing the total market vacancy rate to 5.19%.

• This marks the second-highest level of first quarter absorption in the past decade, reinforcing the market’s ability to sustain strong leasing momentum.

• The modern bulk vacancy rate also improved, declining to 5.57% from 7.78% in Q4.

• Construction activity remained limited in Q1, with only one speculative project breaking ground in the Southwest submarket. The current pipeline is concentrated in smaller-format buildings, with all speculative projects under 400,000 square feet.

• This shift highlights a growing disconnect between new supply and tenant demand at the upper end of the market, where there are currently no available options between 500,000 and 800,000 square feet. Several 500,000+ square foot projects are expected to break ground in Q2.

• Approximately 94% of modern bulk space delivered since 2022 is now occupied or under lease, with stabilization timelines averaging 17 months.

• Smaller industrial properties under 200,000 square feet continue to lease more quickly, averaging approximately 13 months, reflecting stronger alignment between available supply and tenant demand.

  
  

Forecast

Modern bulk product is entering a period of constrained supply as 2025 leasing activity absorbed a significant share of space delivered between 2022 and 2024, sharply limiting large-block availability for big-box users.

Availability of true bulk first-generation space has declined to 1.2%, rising to just 2.5% when including projects under construction. Absorption has averaged roughly 8.2 million square feet annually since 2015, underscoring the market’s ability to consistently absorb new supply. However, the current volume of speculative construction remains below historical absorption levels, limiting the market’s ability to replenish modern bulk inventory in line with historical demand trends.

Constraints are most evident at the upper end of the market, where there are currently no modern bulk availabilities between 500,000 and 800,000 square feet and only three options exceeding 800,000 square feet.

This dynamic is expected to create a near-term supply gap through 2026, as new speculative starts will not deliver until late 2026 or early 2027. With first-generation availability already near cyclical lows and second-generation space representing a relatively stable but limited share of inventory, new tenant demand will increasingly face a constrained set of options.

As a result, modern bulk availability is likely to continue trending downward in the near term, driven primarily by further tightening in first-generation availability, while second-generation space remains relatively steady. This will reinforce a landlord-favored environment for modern bulk distribution facilities, supporting rent growth and increasing competition for high-quality space. The current environment creates a window for new development starts, as improving fundamentals and limited forward supply provide clearer demand signals for developers evaluating future projects.

Absorption & Leasing

In the first quarter, net absorption totaled 4.1 million square feet, reflecting continued tenant demand across the market. Absorption was concentrated in the Madison, Southwest, and Pickaway submarkets. The majority of large occupancies ranged between 100,000 and 300,000 square feet, indicating sustained activity among mid-sized users.

The largest move-in was Amazon, which occupied 1.1 million square feet at 44 Commerce Parkway in the Madison submarket, while the largest move-out was Canon, vacating 120,979 square feet at 2525 Rohr Road in the Southeast submarket.

Total lease transaction volume totaled 5.9 million square feet. New leases accounted for 69% of total leasing activity, with deals in the Southeast and Southwest submarkets representing 46% of new volume.

Vacancy & Market Rents

The total market vacancy rate in Columbus declined 1.2% quarter-over-quarter and 3.2% year-over-year to 5.19%, as demand outpaced new supply. The former Big Lots space at 300-550 Phillipi Rd increases the overall vacancy rate by 1%. Vacancy compression was most pronounced in buildings over 600,000 square feet, where vacancy fell 2.5% quarter-over-quarter.

The CBD submarket recorded the largest decline in vacancy, decreasing 11.3% during Q1 following Western Partitions occupying 260,640 square feet at 2255 Parsons Avenue. Additionally, the Madison submarket vacancy rate dropped 5.1% due to Amazon occupying 44 Commerce Parkway.

Average asking rents decreased $0.29 quarter-over-quarter to $6.57 per square foot (NNN), as the lease-up of higher-priced modern bulk space shifted the remaining availability toward older, lower-cost product. Modern bulk asking rents rose to $6.97 per square foot (NNN), up from $6.83 last quarter, as leasing activity tightened availability of premium space.

Sales Activity

Investment activity held steady in Q1 with total sales volume of $419.7 million and an average price of $102.86 per square foot. The largest transaction of the quarter was Amazon’s $95.9 million acquisition of 44 Commerce Parkway from Stonemont Financial Group.

Single-tenant assets remained a focus for buyers. LCN Capital Partners purchased 9885 Innovation Campus Way, which Hims & Hers fully leased in Q3 2025. Additionally, CapitalLand Ltd acquired 8695 Basil Western Road NW in a sale-leaseback transaction with DHL. In addition to single-asset acquisitions, Weston, Inc. acquired 21 Columbus-area properties totaling 300,101 square feet for $25 million. 

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Check out the full Q1 2026 Industrial Trends report here!

Q1 2026 Industrial Trends