A rise in new construction completions and move-outs pushed the U.S. industrial vacancy rate up 26 basis points to 7.3% during the second quarter of this year, according to the latest research from Colliers.

That’s one of the key takeaways from Colliers’ second quarter 2025 U.S. industrial market report.

Another big one? Despite the rise in vacancy, tenant demand was positive in the second quarter. That marks 60 consecutive quarters or 15 years of continuous occupancy growth in the U.S. industrial sector, according to Colliers.

Even though that 7.3% vacancy rate is the highest level for this sector since 2013, Colliers says that the long-term fundamentals of the U.S. industrial market remain solid. Vacancy for U.S. industrial assets is expected to peak at 7.5% by the end of 2025.

Colliers said that the Midwest region is the closest to achieving a market recalibration, with vacancy in this region’s industrial properties increasing just 11 points on a year-over-year basis to 5.4%. That is the lowest vacancy rate as of the end of the second quarter of all U.S. regions.

The South holds the highest industrial vacancy rate, 8.6% as of the end of the second quarter, an increase of 91 basis points year-over-year.

In another sign that the U.S. industrial market is going through a period normalization, Colliers reported that this sector saw just 23 million square feet of net absorption during the second quarter. That is less than half of the 51 million square feet of net absorption recorded during the same quarter a year ago.

New industrial supply increased slightly to 71 million square feet in the second quarter as the recent surge in new development continue to deliver completions. But Colliers says that new industrial supply is expected to average closer to 45 million square feet during each of the next four quarters.