Q3 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
Sustained occupier demand continued to tighten the Columbus industrial market, pushing year-to-date absorption above 10 million square feet. The pace of leasing through year-end and into 2027 will provide an early indication of how effectively the market can absorb the next wave of speculative supply.
Market Trends
The Columbus industrial market recorded 3.5 million square feet of positive net absorption during the third quarter, bringing year-to-date absorption to 10.8 million square feet and reducing the direct vacancy rate from 5.0% to 4.1%.
Vacancy compression accelerated during the quarter as occupancies increasingly absorbed existing inventory. Modern bulk direct vacancy declined 1.6% quarter-over-quarter to 3.5%.
Larger blocks of available space continued to tighten. Buildings between 400,000 and 600,000 square feet recorded 1.34 million square feet of positive absorption, reducing direct vacancy from 6.0% to 3.1%.
Approximately 93% of industrial space delivered since 2022 is now occupied or under lease, with full stabilization averaging 16.4 months. Continued lease-up of the previous development cycle has significantly reduced first-generation availability.
The construction pipeline has expanded to approximately 13.7 million square feet, including 12.1 million square feet of modern bulk space. More than half of the current pipeline is concentrated in buildings exceeding 400,000 square feet, increasing future options for large occupiers.
With vacancy continuing to compress as the development pipeline expands, the pace of pre-leasing will be an important indicator of how effectively the market absorbs the next wave of speculative supply.
Forecast
Strong tenant demand and continued vacancy compression have supported the return of speculative development, with the market now preparing for a significant wave of new supply in 2027. Approximately 12.1 million square feet of speculative space is currently scheduled to deliver through the end next year, with nearly 7.4 million square feet concentrated in the first half.
The timing of these deliveries places greater emphasis on pre-leasing activity over the coming quarters. With direct vacancy at 4.1% and larger existing blocks becoming increasingly limited, projects underway will replenish options for occupiers seeking modern space. The extent to which tenants commit to these buildings ahead of completion will determine how significantly new deliveries affect vacancy.
Demand remains strong heading into this next development cycle. Net absorption has reached 10.8 million square feet through the third quarter, already placing 2026 among the strongest absorption years of the past decade. Continued leasing momentum would provide an important foundation for absorbing the incoming pipeline.
As the market moves into 2027, the balance between pre-leasing and speculative deliveries will be the primary indicator of near-term vacancy trends. Strong pre-leasing could allow the market to absorb much of the new supply while preserving recent vacancy gains, while slower commitments would likely result in a temporary increase in available modern bulk space.
Absorption & Leasing
Net absorption totaled 3.5 million square feet during the third quarter, supported by continued lease-up of recently delivered industrial inventory and increased occupancy of second-generation space. Several of the quarter’s largest move-ins occurred in existing facilities, signaling broader demand beyond first-generation speculative product. Activity was led by the Southeast submarket with an increase in occupancies between 300,000 and 400,000 square feet.
Leasing activity accelerated in the third quarter, totaling 9.9 million square feet. New leases accounted for 62.3% of transaction volume, with the Southeast submarket representing 49.7% of new leasing activity. General industrial properties recorded a greater number of transactions, while modern bulk facilities accounted for the majority of square footage leased, reflecting continued demand for larger, modern distribution space.
Vacancy & Market Rents
The overall market vacancy rate dropped to 4.1% during the third quarter, down from 5.0% in Q2 as continued absorption further tightened existing inventory. Vacancy compression was more pronounced among modern bulk assets, where direct vacancy fell 1.6% quarter-over-quarter to 3.5%.
Vacancy tightened across several key segments of the market. Buildings between 400,000 and 600,000 square feet recorded the largest improvement, with direct vacancy declining from 6.0% to 3.1% quarter-over-quarter. At the submarket level, the CBD recorded the largest decline following Amazon’s occupancy at Castings Commerce Park. Madison and Pickaway also posted significant improvements as large occupancies reduced available inventory.
Average asking rents increased during the quarter, influenced in part by a greater concentration of higher-priced, first-generation space within available inventory as speculative development activity increased.
Sales Activity
Industrial sales volume reached $702.2 million during the third quarter, nearly tripling from Q2 and marking the highest quarterly total since Q4 2021. Five transactions exceeding $50 million drove much of the increase, while the average sale price reached $122.17 per square foot, among the highest levels recorded in recent years.
Institutional acquisitions of large modern bulk assets accounted for a significant share of quarterly volume, reflecting continued investor demand for newer distribution facilities. Owner-users also remained active among smaller properties, demonstrating healthy demand across both investment and owner-occupied segments.
Check out the full Q3 2026 Industrial Trends report here!
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