The Central Will industrial submarket maintained strong performance in Q1 2026, with vacancy holding at a low 1.4%, slightly above its recent historical average but still indicative of tight conditions. A modest uptick in vacancy was driven by limited new deliveries outpacing absorption, though overall availability remained constrained at 1.9%. Development activity continued to build momentum, with 100,000 SF underway, well above long-term norms, reflecting confidence in demand fundamentals. Rent growth remained a key driver, rising 4.9% year over year and outperforming the broader market. While growth is expected to normalize later in the year, fundamentals remain healthy, supported by limited supply, steady tenant demand, and a logistics-heavy inventory base.

 

Key Highlights

• Vacancy remains near historic lows despite a recent uptick, reflecting limited available space and continued tenant demand, keeping overall conditions landlord-favorable across the market.
• Asking rents have reached new highs, supported by constrained supply and consistent demand, with growth remaining above long-term averages, signaling a stable and maturing pricing environment.
• Construction levels have increased meaningfully and sales activity remains steady, indicating growing confidence among developers and investors in the submarket’s long-term fundamentals and demand outlook.

 

Rents

Rents have continued a steady upward trajectory, reaching a new peak in Q1 2026. Growth over the past year has been consistent, with only minor quarter-to-quarter fluctuations, reflecting stable demand and limited available space. The overall trend highlights sustained pricing power for landlords, particularly as newer, higher-quality product enters the market at premium rates. While rent growth has moderated slightly compared to earlier periods of rapid acceleration, it remains healthy and above long-term averages.

 

Market Asking Rent Per SF

Source: CoStar Group, Inc.

 

Vacancy

Vacancy has trended upward over the past year, rising from historically tight levels to 1.43% in Q1 2026. While this marks a noticeable increase from near-zero vacancy seen in 2023 and early 2024, overall conditions remain exceptionally constrained. The recent uptick reflects a combination of new deliveries and softer absorption, rather than a fundamental weakening in demand. Despite this movement, vacancy is still well below long-term averages, indicating a landlord-favored market.

 

Vacancy Rate

Source: CoStar Group, Inc.

 

Construction

Construction activity has increased notably over the past year, signaling renewed development momentum. After fluctuating at lower levels, the pipeline expanded significantly through 2025, peaking before stabilizing at 100,000 SF entering Q1 2026. This sustained level of development remains elevated compared to prior years and reflects growing confidence in tenant demand and market fundamentals. The rise in construction suggests developers are responding to persistently tight vacancy and positioning for continued leasing activity.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Sales

Sales activity in the Central Will industrial submarket has remained steady over the past year, with transaction volume aligning closely with long-term averages despite some quarterly volatility. Deal flow has been uneven, with a few larger transactions driving overall volume, while several quarters recorded limited or no activity, reflecting a more selective investment environment. Pricing has shown gradual upward movement, with recent trades trending above prior years, signaling stable asset values. However, pricing still sits below the broader market average, positioning Central Will as a relatively affordable option for investors. Cap rates remain in line with the market, indicating balanced risk and return expectations. Overall, investor interest persists, supported by strong fundamentals and long-term demand drivers.

 

Sales Volume & Market Sale Price Per SF

Source: CoStar Group, Inc. 

 

By the Numbers

Source: CoStar Group, Inc.

Sales Volume: $870K

Cap Rate: 8.1%

Price Per SF: $84

Vacancy Rate: 1.4%

Rent Growth (YoY): 5.0%

Asking Rent Per SF: $7.71

Under Construction (SF): 100K

Absorbed (SF): (11.9K)