Manufacturing, Big-Box Leasing Fuel U.S. Industrial Reset in 2026

The U.S. industrial market is on stronger footing after the first half of 2026, with stronger leasing activity, calmer development compared to the pandemic-era highs, and a new wave of manufacturing investment reshaping demand.

National asking rents climbed 1.8 percent year-over-year to $9.74 per square foot per year on a triple-net basis, despite elevated vacancy and rising sublease availability, according to a report from Savills.

After two years of sustaining record-high deliveries, the national vacancy rate finished the second quarter at 8.2 percent, unchanged from the first quarter, and just 10 basis points higher than a year ago.

Industrial leasing hit 491 million square feet through the first half of the year, which is 27 percent more than the first six months of 2025. The numbers represent the third-strongest first-half leasing total on record behind the pandemic boom years of 2021 and 2022.

Deals for larger spaces — particularly leases exceeding 750,000 square feet — are driving activity nationally as big distributors and logistics users regain confidence after months of tariff and supply chain uncertainty, per Savills. As such, quarterly net absorption more than doubled year-over-year to 53.3 million square feet, while first-half absorption was 28 percent higher than during the same period in 2025.

Meanwhile, industrial construction has also continued to reset. The national pipeline ticked up modestly to 320 million square feet, less than half the 782 million-square-foot peak in late 2022. Deliveries dropped to 49.4 million square feet during the second quarter from more than 82 million square feet at this point last year.

At the same time, industrial demand is diversifying. Logistics remains the sector engine, but manufacturing is growing significantly. Savills tracked nearly 66,000 manufacturing jobs announced over the trailing 12 months through May, accompanied by almost $50 billion in planned capital investment.

And, instead of electric vehicle manufacturing, the latest wave of investment is spreading across aerospace and defense, artificial intelligence infrastructure, energy equipment and pharmaceuticals.

Defense manufacturing alone accounted for roughly 40 percent of announced manufacturing jobs during the past year, while AI and energy infrastructure represented another 26 percent. Life sciences, fueled by multibillion-dollar investments from companies such as Eli Lilly, Johnson & Johnson, Regeneron and AbbVie, made up 12 percent as drug manufacturers expand domestic production in response to patent expirations, GLP-1 demand and onshoring incentives.

The manufacturing boom continues to favor the Sun Belt and Southeast. North Carolina led the nation in announced manufacturing jobs, followed by Texas and California.

Southern California remains the top market in the U.S. due to its proximity to the country’s largest port complex, but the state ranked among the top five for new manufacturing jobs over the trailing 12 months to support the region’s aerospace, defense and advanced manufacturing growth.

The Washington, D.C.-Maryland-Virginia market is increasingly tied to national security, data infrastructure and defense manufacturing. For instance, Micron started producing semiconductor memory at its facility in Manassas, Va., backed by more than $2 billion in investment and supporting more than 3,100 jobs tied to automotive, defense and aerospace applications.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.