TAG Industrial Watch: May 30, 2026

The industrial market is showing signs of stabilization, but a full recovery remains a work in progress. Q1 2026 leasing totaled 226.7 million square feet, the strongest first quarter since 2022 and up 20.8% year-over-year, and DFW big-box vacancy fell 190 basis points to 12.4% in the second half of 2025. Those are encouraging data points, but national vacancy still sits at 8.2% with a record 1.5 billion square feet available, sublease space at an all-time high, and effective rent growth flat when concessions and inflation are factored in. The headline leasing numbers are improving; the fundamentals haven’t fully followed.

The demand that is materializing is highly selective. More than 270 million square feet of recent absorption landed in buildings constructed this decade, as tenants with options continue gravitating toward modern logistics facilities. Older product, particularly pre-1980s buildings, is absorbing the pressure on the other end. This flight to quality is sharpening the divide between assets that are seeing real leasing momentum and those that aren’t.

Supply is the clearest reason for measured optimism. Inventory growth is projected to slow to just 1% in 2026, construction starts fell 13% in the six months through March, and more than 70% of near-term deliveries are already pre-leased. Recent court rulings striking down the Trump tariffs remove one of the more significant demand overhangs from the past year. Energy costs and East Asia freight rates remain elevated and bear watching. For owners and investors, the setup is gradually improving, but the spread between well-located modern product and everything else is wide and likely to stay that way.

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I N D U S T R I A L   N E W S

A Record 1.5B SF Of Industrial Space Is In Search Of Tenants
Bisnow – February 5, 2026
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Building Momentum? Big-Box Industrial Market
Picked Up Steam In Second Half Of 2025
REjournals – May 1, 2026
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Industrial Demand Reorients ​​As Tenants
Pivot To Modern Space
GlobeSt.com – May 11, 2026
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Industrial Demand Turns The Corner In Q1
Commercial Property Executive – May 13, 2026
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Trade Court Strikes Down A Second Round Of Trump Tariffs 
NPR – May 7, 2026
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R E G I O N A L   N E W S

Machinery Company Acquires Suburban
Chicago Office, Warehouse Space
Connect CRE – May 20, 2026
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Chicago’s Cold Storage Reset: Modern Product
Rises As Aging Inventory Lags
REjournals – May 19, 2026
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Havener Cos. Secures 93 KSF Fort Worth Industrial Lease
Commercial Property Executive – May 4, 2026
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Borderlands Mexico: Cross-Border Trade Tops
$84B In March As USMCA Talks Heat Up
Freightwaves – May 17, 2026
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500,000-Square-Foot Industrial Development
Coming To South Fort Worth
Yahoo! News – May 12, 2026
Read More

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