Everyone says wait for industrial vacancy to peak, but does a first time buyer actually need to?

Question

The industrial supply correction has been telling a consistent story for months. Vacancy around 6.7 percent at the end of 2025, construction starts way down from 2022, absorption forecast to jump in 2026, vacancy expected to peak somewhere mid 2026 and tighten after that. So the obvious reading is: sit tight until the peak, then buy into a tightening market and look smart for it. The less obvious reading is that if everyone can read the same forecast, the peak is the moment sellers stop being flexible. Right now a buyer can find owners in oversupplied southern markets who will actually talk about price and about paying for a TI allowance. In eighteen months, if absorption really does come in strong, the same building has a leased tenant and a seller who does not need that buyer. Against that: someone making a first industrial purchase gets one shot at it, and buying into a market where a competing landlord two miles away has 40,000 square feet of empty new space is a real way to sit vacant for a year. Which of those two mistakes is bigger for someone with no industrial experience? Buying early into softness, or waiting and paying for the recovery.

kevin_lombard · Answer

I read the same forecast twice and the thing that stuck with me the second time is that the peak is a national number. My little market doesn't have a peak, it has whoever built the last building. So I'm not sure waiting for mid-2026 tells you anything about the specific block you'd be buying on.

laurenkim53 · Answer

In rural markets there was not much of a boom, so there is not much of a correction either. The 6.7 percent figure is basically a story about places with institutional developers. In a small market the constraint is usually that nobody has built anything since 2008 and the existing stock is 18 foot clear with one dock door. Different problem entirely. If you are buying somewhere with no new supply pipeline, waiting for the national vacancy peak just costs you rent.

monica_tran3 · Answer

The tenants shopping these buildings right now are picky about dock doors and power and they will absolutely wait for a better deal. That is the softness you are describing, seen from the other side. A first-time owner should not expect a quick lease-up on an older box in this market, quill. What the market does offer is the older box at a cheap price, if you are honest with yourself about carrying it empty.

tylerbrooks9 · Answer

The cleaner answer is to buy something already leased, say a tenant nine years into occupancy, and stop trying to time anything. The whole timing question only matters if you are buying vacant or near vacant space. Buy in-place income at a price that works on today's rent, and whether vacancy peaks in March or September of 2026 stops being your problem.

Everyone says wait for industrial vacancy to peak, but does a first time buyer actually need to?

4 replies