{"id":8952,"date":"2026-10-14T08:54:46","date_gmt":"2026-10-14T12:54:46","guid":{"rendered":"https:\/\/www.lee-associates.com\/easternpa\/?p=8952"},"modified":"2026-10-14T08:54:48","modified_gmt":"2026-10-14T12:54:48","slug":"q3-26-industrial-market-report","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/easternpa\/2026\/10\/14\/q3-26-industrial-market-report\/","title":{"rendered":"Greater Philadelphia Industrial Leasing Reaches its Highest Level Since Early 2025, While Availability Remains Elevated"},"content":{"rendered":"<div id=\"pl-8952\"  class=\"panel-layout\" ><div id=\"pg-8952-0\"  class=\"panel-grid panel-no-style\" ><div id=\"pgc-8952-0-0\"  class=\"panel-grid-cell\" ><div id=\"panel-8952-0-0-0\" class=\"so-panel widget widget_sow-editor panel-first-child panel-last-child\" data-index=\"0\" ><div\n\t\t\t\n\t\t\tclass=\"so-widget-sow-editor so-widget-sow-editor-base\"\n\t\t\t\n\t\t>\n<div class=\"siteorigin-widget-tinymce textwidget\">\n\t<p><em>Lee &amp; Associates of Eastern Pennsylvania releases Q3 2026 Industrial Intel report, finding active tenant demand and continued market competition.<\/em><\/p>\n<p><strong>Mechanicsburg, PA \u2013 <\/strong>Lee &amp; Associates of Eastern Pennsylvania has released its Q3 2026 Industrial Intel report, tracking industrial market conditions across Greater Philadelphia and surrounding submarkets. Leasing activity increased to 12.4 million square feet, its highest quarterly level since Q2 2025, while net absorption remained positive at 3.6 million square feet.<\/p>\n<p>Despite the improvement in leasing, market availability continued to rise. Vacancy increased 21 basis points from the previous quarter to 8.39%, largely following the delivery of 11 buildings across the region. Nearly 80% of their combined square footage came to market vacant. Availability rose to 13.59%, leaving a 520-basis-point gap between availability and vacancy rates.<\/p>\n<p>The gap remains well above recent historical averages, suggesting that the market\u2014while showing signs of improvement\u2014remains competitive. Available sublease space continues to affect the market, as does space marketed before current tenants move out.<\/p>\n<p><strong><em>\u201cLeasing activity and continued positive net absorption are signs that the market is heading in the right direction,\u201d<\/em><\/strong>, said Heather Kreiger, CCIM, Principal and Regional Research &amp; Marketing Director at Lee &amp; Associates of Eastern Pennsylvania. <strong><em>\u201cHowever, we haven\u2019t yet crossed the threshold where we can say the market has fully recovered. Tenants are still making decisions, but newly delivered space and space marketed ahead of move-outs are outweighing current demand and adding to the competition.\u201d<\/em><\/strong><\/p>\n<p>Sublease space continued to decline during the quarter, extending a trend seen throughout 2026. Available sublease space with two or more years remaining on the term fell from 12.8 million square feet in Q2 to 10.2 million in Q3. Short-term sublease space declined from 1.5 million to just over 1 million square feet. Meanwhile, direct availability marketed by landlords before tenants move out continues to contribute to the gap between availability and vacancy.<\/p>\n<p>Market conditions also vary by building size. Buildings between 100,000 and 500,000 square feet account for a substantial share of total market inventory and face numerous competing availabilities. By contrast, vacancy among buildings larger than 1 million square feet declined from 4.06% in Q2 to 3.57% in Q3. Eight buildings larger than 1 million square feet are under construction across the region; two are spoken for and six remain available. Kreiger said demand for large-box space has increased, underscoring the importance of considering the size and fit of a space rather than relying on marketwide totals alone.<\/p>\n<p><strong><em>\u201cAvailabilities with good locations and access to labor will likely continue to attract attention,\u201d<\/em><\/strong> Kreiger said. <strong><em>\u201cOther properties may need creative lease-up strategies because there is a lot of competition in certain parts of the market. Tenants are also being more thoughtful about their decisions, so deal economics are a really important consideration right now.\u201d<\/em><\/strong><\/p>\n<p>Occupier decisions depend on whether available space actually fits a company\u2019s operations. Loading configurations, clear height, power, transportation access, labor availability, parking and proximity to customers can narrow the practical choices. Concessions such as free rent and tenant improvement allowances may also affect the total economics of a transaction.<\/p>\n<p>Performance differed across submarkets. Central Pennsylvania recorded 5.9 million square feet of leasing and 2.7 million square feet of positive net absorption, its strongest leasing quarter in three years. Southern New Jersey recorded its sixth consecutive quarter of positive absorption and continued to see vacancy decline amid limited new construction deliveries. In Lehigh Valley and Northeastern Pennsylvania, vacant speculative deliveries and tenant givebacks affected market conditions.<\/p>\n<p>Looking ahead, Lee &amp; Associates will be watching whether availability stabilizes and leasing activity holds as macroeconomic conditions continue to influence tenant decisions. The firm is anticipating that another 10 million square feet of new construction will be delivered over the next 6 months. If current tracked demand holds, it is expected that much of that activity will positively affect the market in 2027 into 2028.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>About the Q3 2026 Industrial Intel Report<\/strong><\/p>\n<p>The Lee &amp; Associates Industrial Intel report is a quarterly analysis of industrial supply, leasing, vacancy, construction, and development across the Greater Philadelphia region. The regional standing-stock dataset includes 685.7 million square feet across Central Pennsylvania, Lehigh Valley, Northeastern Pennsylvania, Metro Philadelphia, Southern New Jersey, and Delaware.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>About Lee &amp; Associates of Eastern Pennsylvania<\/strong><\/p>\n<p>Lee &amp; Associates is a full-service commercial real estate firm with offices in Mechanicsburg, Plymouth Meeting, &amp; Pittsburgh PA. The firm\u2019s Research division provides deep market intelligence and custom analytics across key industrial submarkets in the Northeast and Mid-Atlantic.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Media Contact:<\/strong><\/p>\n<p>Heather Kreiger, CCIM<\/p>\n<p>Principal and Regional Research &amp; Marketing Director for the Lee Pennsylvania offices<\/p>\n<p>hkreiger@lee-associates.com | 610.590.1007<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>Lee &amp; Associates of Eastern Pennsylvania releases Q3 2026 Industrial Intel report, finding active tenant demand and continued market competition. Mechanicsburg, PA \u2013 Lee &amp; Associates of Eastern Pennsylvania has released its Q3 2026 Industrial Intel report, tracking industrial market conditions across Greater Philadelphia and surrounding submarkets. Leasing activity increased to 12.4 million square feet, its highest quarterly level since Q2 2025, while net absorption remained positive at 3.6 million square feet. Despite the improvement&#8230;<\/p>\n","protected":false},"author":199,"featured_media":8953,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1212],"tags":[],"class_list":["post-8952","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-view-all-lee-associates-of-eastern-pennsylvania-blog-posts","category-research"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.7 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Greater Philadelphia Industrial Leasing Reaches its Highest Level Since Early 2025, While Availability Remains Elevated - Eastern Pennsylvania<\/title>\n<meta name=\"description\" content=\"Lee &amp; Associates of Eastern Pennsylvania has released its Q3 2026 Industrial Intel report, tracking industrial market conditions across Greater Philadelphia and surrounding submarkets. Leasing activity increased to 12.4 million square feet, its highest quarterly level since Q2 2025, while net absorption remained positive at 3.6 million square feet.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lee-associates.com\/easternpa\/2026\/10\/14\/q3-26-industrial-market-report\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Greater Philadelphia Industrial Leasing Reaches its Highest Level Since Early 2025, While Availability Remains Elevated\" \/>\n<meta property=\"og:description\" content=\"Lee &amp; Associates of Eastern Pennsylvania has released its Q3 2026 Industrial Intel report, tracking industrial market conditions across Greater Philadelphia and surrounding submarkets. Leasing activity increased to 12.4 million square feet, its highest quarterly level since Q2 2025, while net absorption remained positive at 3.6 million square feet.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lee-associates.com\/easternpa\/2026\/10\/14\/q3-26-industrial-market-report\/\" \/>\n<meta property=\"og:site_name\" content=\"Eastern Pennsylvania\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LeeAssociatesPA\/\" \/>\n<meta property=\"article:published_time\" content=\"2026-10-14T12:54:46+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-10-14T12:54:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lee-associates.com\/easternpa\/wp-content\/uploads\/sites\/83\/2026\/10\/MarketReport-Website-Q3-26.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"698\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bri Sicilia\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@LeeAssociatesPA\" \/>\n<meta name=\"twitter:site\" content=\"@LeeAssociatesPA\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bri Sicilia\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/\"},\"author\":{\"name\":\"Bri Sicilia\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/#\\\/schema\\\/person\\\/71561fae8e8e297bc43cee793d6fe2a0\"},\"headline\":\"Greater Philadelphia Industrial Leasing Reaches its Highest Level Since Early 2025, While Availability Remains Elevated\",\"datePublished\":\"2026-10-14T12:54:46+00:00\",\"dateModified\":\"2026-10-14T12:54:48+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/\"},\"wordCount\":756,\"publisher\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/wp-content\\\/uploads\\\/sites\\\/83\\\/2026\\\/10\\\/MarketReport-Website-Q3-26.jpg\",\"articleSection\":[\"All\",\"Research\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/\",\"url\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/\",\"name\":\"Greater Philadelphia Industrial Leasing Reaches its Highest Level Since Early 2025, While Availability Remains Elevated - Eastern Pennsylvania\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/2026\\\/10\\\/14\\\/q3-26-industrial-market-report\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.lee-associates.com\\\/easternpa\\\/wp-content\\\/uploads\\\/sites\\\/83\\\/2026\\\/10\\\/MarketReport-Website-Q3-26.jpg\",\"datePublished\":\"2026-10-14T12:54:46+00:00\",\"dateModified\":\"2026-10-14T12:54:48+00:00\",\"description\":\"Lee & Associates of Eastern Pennsylvania has released its Q3 2026 Industrial Intel report, tracking industrial market conditions across Greater Philadelphia and surrounding submarkets. 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