There has been broad general improvement across North American industrial markets, with demand for space rebounding in the United States and increased supply in Canada that has brought the nation’s markets into greater balance.

In the U.S., third-quarter net absorption totaled 84,081,618 SF, as more users gradually have set aside tariff and trade concerns that have hobbled tenant expansion since 2023. The Q3 gains are an 89% improvement from 44.4 million SF in Q2 and a year-on-year jump of 172%.

The third quarter’s growth brought the year-to-date total to 161.2 million as net absorption has recovered from three years of tepid growth. Despite the increase so far this year, tenant expansion continues to fall short of absorbing the volume of deliveries that total 168.5 million SF this year.

Deliveries have totaled 1.3 billion SF since 2022 against 576.2 million SF of net absorption. The surfeit of space and weak demand has driven up the vacancy rate from 3.9% in 2022 to the current 7.3%. READ MORE >

The post-pandemic recovery of the North American office market diverged in the third quarter as tenant growth stalled in the United States while Canada notched the most demand in eight years.

Nevertheless, the overall North American office market is posting its best year since the lockdown, with demand for U.S. space on track to halt its six-year slide totaling negative 223 million SF.

After the U.S. market reported 29.7 million SF of expansion across four straight quarters, third-quarter net absorption was negative 4.9 million SF. Seventy percent of the Q3 leasing deficit was in Class B buildings.

As a result, the U.S. vacancy rate has retreated about 20 basis points from its 14% peak reached in 2025. While vacancy remains historically high, the leasing market generally has recovered. The number of lease deals executed year to date was the most in a decade, but the average size remains roughly 15% less than in the late 2010s.

This has occurred despite a general lack of hiring by such traditional office-using employers as information, finance and professional services, which have shed some 600,000 jobs since early 2023. READ MORE >

Demand for North American retail space continued to rebound with strong third-quarter merchant expansion in the United States and across-the-board gains in Canada. U.S. net absorption for Q3 was 9,969,407 SF, bringing the year-to-date total to 15,360,897 SF – a turnaround from 2025 when overall tenant growth virtually was flat. The overall Q3 vacancy rate settled at 4.3% and remains near historic lows. Available space remains scarce and retailer demand continues to exceed supply across many markets.

The recovery has been broad-based across formats, tenants and regions. The improvement was driven by a combination of stronger move-in activity, slowing closure-related move-outs and continued backfilling of space vacated during the prior 12 to 18 months. Retailers continued expanding in value-oriented, grocery, off-price, fitness, restaurant and service-oriented categories. The signing pace for future store openings remained elevated. And continues to outpace closures nationally, extending a years-long trend.

The most important force supporting fundamentals remains the sector’s limited supply. Construction starts remain near decade lows despite vacancy rates that would historically support a larger development cycle. READ MORE >