The U.S. industrial sector was on a tear in the second quarter, with net absorption increasing to more than 60 million square feet for the second time in three quarters, according to the latest U.S. industrial report from Cushman & Wakefield.

Demand was broad-based and was continuing to build momentum. The first half of 2026 was the strongest six-month period for the industrial sector since 2023. Cushman & Wakefield reported that second-quarter absorption climbed 21% quarter over quarter. Net absorption in warehouses built since 2020 hit 113.6 million square feet year in the first half of the year. The four-quarter rolling total for net industrial absorption hit 236 million square feet, 17.3% higher than the post-pandemic years of 2023-2025 when absorption averaged 201 million square feet per year.

Nine markets recorded net absorption of more than 5 million square feet so far this year, including Dallas-Fort Worth, which absorbed about 13.5 million square feet in industrial space alone. Other top markets included Houston, with nearly 12 million square feet absorbed, Phoenix with more than 9 million square feet, Indianapolis at nearly 8 million square feet and Columbus, Ohio, at nearly 7 million square feet.

While most of the country’s top nation’s industrial sectors were showing growth, the report found that the Inland Empire region of California, one of the nation’s largest centers for warehouses, suffered a negative net absorption of 3.8 million square feet in the first half of the year.

New leasing volume was up 16% year over year, reaching the highest level since mid-2022. Dallas-Fort Worth led the nation with leases on more than 40 million square feet of industrial space. The Inland Empire leased 28.5 million square feet and Chicago leased nearly 22 million square feet.

The nation’s industrial vacancy rate fell 10 basis points during the second quarter to 6.9%. Cushman & Wakefield wrote the falling vacancy rates indicated that demand was accelerating, but new supply was limited and sublease availability was declining. The squeeze in warehouse availability has pushed up rents by an average of 2.9% year over year. Rent increases are widespread, with 67% of the 83 markets that Cushman & Wakefield follows reporting positive annual rent growth.

Rent increases seen in 2026 have been modest. Over the past five years, however, U.S. asking rents have increased an average of 47%, with 12 markets posting gains of more than 60%. The markets with the strongest rent growth during the past five years include Philadelphia, which registered a 96% rent growth; Nashville, Tenn., boasted an 82% increase; and Fort. Lauderdale, Florida, which saw rents rise 77%.

Tight supplies are also beginning to increase the number of projects in the new construction pipeline. Deliveries during the second quarter totaled 62 million square feet, up 8.3% from the first quarter, but down 16% year over year. Deliveries for the first half of the year were 119 million square feet, 19.2% below the first half of 2025. The new construction pipeline is up 18% year over year to about 305 million square feet.