U.S. large industrial new leases hit 92% of peak as renewals fall

The count of new U.S. industrial leases has returned to its historical peak while the renewal index has fallen, and leases of 200,000 square feet or more sit at 92% of their peak, according to CoStar data reported by IREI on Oct. 23.

The 50,000–199,999-square-foot segment has recovered to about 90% of its peak, with every category below 50,000 square feet at roughly 91–98%, according to CoStar. Momentum has begun to level off in several size ranges, the data show.

For an allocator or lender underwriting an industrial rent roll, that split matters more than the signings headline. The indexes count leases signed, not space occupied, and the reporting does not give the rents those leases cleared. A rent roll whose renewal schedule has thinned carries exposure that a strong new-lease count does not offset, and the renewal index is the part of the dataset that speaks to it.

Juan Arias, CoStar Group's national director of industrial analytics, said new leasing "does not translate one-for-one into net absorption" and that "relocations and weaker renewals can leave space behind." How quickly landlords can backfill existing buildings will also shape the recovery, he said.

Dallas-Fort Worth and Austin lead the recovery at 97% and 95% of peak, respectively, on average across size bands, according to CoStar. Those markets, along with Houston, have reached their historical peak for leases of 200,000 square feet or more. St. Louis, East Bay and Cincinnati average 53–59% of peak across size bands.

Arias also said demand nationally is extending beyond the newest warehouses into older buildings larger than 500,000 square feet, while midsized buildings still face excess supply and elevated competition for tenants.