Demand for North American industrial space in the second quarter continued to recover from slowing caused by heightened trade uncertainties that began early last year. But the improvement has been uneven. Canada's strong year-to-date net absorption surpassed its total of the last two years. Meanwhile, modest tenant expansion in the United States remains well off pre-Covid average growth. In the U.S., 44.4 million SF of net absorption in the second quarter brought the mid year total to 77.1 million SF, about 30% less than the pre-pandemic five-year average.

First-half deliveries fell to 93 million SF, which included 44.4 million SF in Q1 - the least in seven years. Although supply additions have been moderated, the pullback in tenant demand over the past three years has produced a supply overhang particularly in many trade-dependent markets.

The leading markets in net absorption over the past 12 months included Dallas-Ft. Worth with 28.7 million SF, 23.5 million SF in Phoenix, 18.3 million SF in Houston, 15.5 million SF in Indianapolis and 12.7 million SF in Columbus. READ MORE >

The North American office market is having its best year since the Covid lockdown, punctuated by vacancy declines in the second quarter across Canada and the United States for the first time since 2019. Tenant growth has returned and institutional investors are showing greater confidence in premium assets. Also, with little new space being built and more obsolete office properties being redeveloped, total inventories in the U.S. and Canada declined together for the first time on record.

Year-to-date net absorption in Canada totals 4.4 million SF and this year could surpass the 5.4 million SF total for 2019.

The turnaround in the U.S. office market over the last four quarters has totaled 29.7 million SF. Following healthy first-half net growth of 16.7 million SF, the U.S. market is on track in 2026 to halt its six-year slide in tenant expansion totaling negative 227.6 million SF.

Not all metros are reporting strong performances, however. New York City, Dallas, Austin, Houston, San Francisco and San Jose are surging, while Los Angeles, Chicago, St. Louis and Washington, D.C., still seek stability. READ MORE >

North American retail property markets continued to show resilience in the second quarter that is generally well-supported by solid operating fundamentals and limited new supply. Although rent growth has been moderating, investors have been active with property sales running more than 30% ahead of last year.

The overall retail market in the United States remained broadly balanced in the first half with strong merchant demand returning in the second quarter that was reflective of seasonal dynamics in a cautious operating environment. Net retail expansion totaled 5.4 million SF in the second quarter, a turnaround from 4.7 million SF of negative absorption in Q1 and the third contraction in five quarters. The decline was driven by a spike in move-outs, which rose to approximately 103 million SF as the calendar year turned over.

Nevertheless, vacancy held steady in Q2, remaining within 40 basis points of the record low in late 2023. The general retail category, with 55% of the 11.7-billion-SF inventory and freestanding tenants from restaurants to car dealers, also has the lowest vacancy rate at 2.7%. Grocery-anchored neighborhood centers make up nearly 25% of retail space and average 6.5% vacancy. Malls, power centers and strip retail account for the balance. READ MORE >