Net absorption of industrial space increased in the third quarter across North America but demand was weak and failed again to keep pace with the supply of new buildings, while tenant growth remained hobbled by tariff concerns and interest rates.

In the United States, following 8.1 million SF of negative absorption in the first half, third-quarter tenant growth totaled 31 million SF. That was off 41% from a year ago and the 22.8 million SF year to date growth was off 70% compared to the first nine months of last year.

Across Canada there was 5,390,568 SF of net absorption in Q3. But year-to-date tenant growth remained slightly in the red at negative 275,450 SF. Net absorption is projected to total only about 1.4 million SF this year compared to the 20-million-SF average annual tenant growth of the previous three years. The tenant expansion also falls short of the more than 100 million SF of new inventory delivered in that period.

In the U. S. the increased net absorption also will be outweighed by the estimated 233.5 million SF of space slated for delivery this year, which follows a three-year, 1.4-billion-SF construction boom. READ MORE >

Tenant demand returned to North American markets in the third quarter, reversing earlier declines as the uncertain office recovery struggles with fits and starts against a backdrop of tariffs and looming AI.

There were 12 million SF of net absorption in the United States in the third quarter. The surge brought year-to-date net growth to negative 4.8 million SF, the lowest total through Q3 since the Covid lockdown. The overall vacancy rate ticked downward from Q2’s record high to settle at 14.1%.

In the U.S., the economy appears to have gathered some strength in the third quarter with stronger consumer spending and a boost in business investment in AI-related equipment. This equipment includes specialized computer chips and hardware made by NVIDIA, Google and others that are designed to efficiently process AI workloads.

Only about half the 80 major metro areas surveyed have posted occupancy gains in the last 12 months. Atop the list with six straight quarters of net tenant growth is New York City with 7.9 million SF. Other markets showing the most tenant growth in the last 12 months are Dallas/Ft. Worth’s 3.6 million SF, 1.5 million SF in Phoenix, 1.3 million SF in Charlotte and 844,343 SF in Houston. Absorption also has turned positive in beleaguered San Francisco, which reports net requirements of 369,581 SF. READ MORE >

North America’s retail real estate markets overall are sound fundamentally at the moment with generally healthy demand, low vacancy rates, healthy rent growth and constrained supply. Given the reduction in transaction activity besetting other CRE categories, retail has re-emerged as a preferred asset class.

In the United States transaction momentum continued with $10.2 billion in property trades in Q3 and $47.8 billion year to date, a 31% increase compared to a year ago. Across Canada, there were $3.5 billion in trades year to date, up 25% from the first nine months of last year. Investors are appreciating the broad retail landscape, looking beyond a recent spike in available space from the latest wave of bankruptcies and closures to register with U.S. and Canadian markets.

In Canada, bankruptcies in the past year were led by the failure of North America’s oldest corporation, Hudson’s Bay, and the shuttering of its 80 stores this spring. Other recent closures included Peavey Mart, Johnson & Murphy, Ricki’s and Cleo, but the new and existing merchant growth substantially reduced the full impact of the closures. Net absorption has totaled 38.9 million SF in the past year, while asking rents are up 2.2%. The vacancy rate is 1.9%. READ MORE >