Staying ahead of the curve is critical to positioning your clients for success in real estate. Juan Arias, National Director of U.S. Industrial Analytics at CoStar Group, joined our recent 2026 Economic Outlook to provide a deep dive into the industrial sector trends we can expect this year. 

Based on his breakdown, here are five key trends you need to watch in 2026 to effectively guide your industrial clients.

1. Import Activity Remains Stagnant

The engine of industrial demand — trade activity — is seeing volatility without significant expansion. While we’ve seen fluctuations, the overall volume of goods entering the U.S. has leveled off compared to the pandemic boom. Brokers should temper expectations for demand driven solely by a surge in net new imports; port activity is stable but not currently a high-growth driver for absorption.

2. Retailers Are Running Lean on Inventory

Retailers are adopting a cautious approach to stocking goods, influenced by tariff concerns and a softer consumer outlook. This caution translates to lower inventory levels, which impacts the immediate need for warehousing space. According to Arias, inventory-to-sales ratios have dropped to around 1.1—some of the lowest levels historically recorded.

3. A Clear Flight to Quality (and Efficiency)

There is a distinct bifurcation in demand. Tenants are leaving older products in favor of modern facilities that offer greater efficiency, particularly higher clear heights. Interestingly, this often results in tenants taking less total square footage because the newer space allows them to stack higher.

“[Tenants] are going into a brand new property with a higher clear height… So, they’re able to rack up more inventory, but occupy a smaller footprint overall,” explained Arias.

4. Sublease Space is a Major Competitor

The market is contending with a significant supply overhang from sublease space — approximately 100 million square feet of it. This isn’t just about availability; it’s about pricing. Sublease options are significantly undercutting direct asking rents, often by around 20%, creating a drag on the overall market.

5. Small Bay Outperforms while Midsize Struggles

Not all industrial sizes are performing equally. The midsize segment (100K-500K sq. ft.) is feeling the brunt of the supply wave and seeing negative rent growth. Conversely, multi-tenant small bay properties are showing resilience and a recovery in leasing activity.

For more 2026 insights, check out our full 2026 CRE market outlook.

This article is provided for general informational purposes only and does not constitute investment, legal, tax, or financial advice, nor a solicitation to buy or sell any security or real estate interest. Readers should consult their own professional advisors before making any investment or business decisions. Market data provided by CoStar Group.The views expressed reflect individual market perspectives and do not represent investment recommendations or company forecasts. Certain statements may be forward-looking in nature and are based on current expectations, which are subject to change due to economic and market conditions.