Des Moines Industrial & Warehouse Market Report | Q1 2026
Key Takeaways
- Des Moines’ industrial warehouse market entered 2026 on firmer footing, with overall vacancy stabilizing around 7.0–7.5% after absorbing a wave of speculative deliveries. Owner-user purchases and expansion by existing occupiers are driving absorption, and the market is steadily working through excess availability.
- Average asking rents held firm at approximately $6.90–7.00/SF NNN, supported by stable demand for modern logistics space, limited speculative construction, and elevated replacement costs. Manufacturing space averages ~$6.40/SF while office/service product commands ~$9.40/SF.
- The construction pipeline is thin and focused on pre-leased projects. Speculative development has slowed significantly, allowing the market to gradually absorb existing vacancy. Developers are requiring signed tenants before breaking ground.
- The northeast submarket (Altoona, Bondurant) remains the strongest area for industrial activity, anchored by logistics operators drawn to I-80/I-35 interchange access and available land for modern distribution facilities. Browse Des Moines warehouse listings on WareCRE.
~7.0%
Overall Vacancy
$6.90
Avg. Asking Rent (NNN/SF)
239K
SF Absorbed (2025 YTD)
Limited
Spec Construction Pipeline
Des Moines’ industrial warehouse market is a Midwest logistics story defined by stability, not drama. Sitting at the crossroads of I-80 and I-35 — two of America’s busiest freight corridors — the metro offers a strategic distribution position that reaches 85% of the U.S. population within two days by truck. Vacancy has stabilized after absorbing speculative deliveries that pushed rates above historical norms, and the market is now working toward balance with limited new supply and steady tenant demand.
For businesses looking for warehouse space in Des Moines, the current environment offers accessible pricing, modern inventory, and a cost structure that dramatically undercuts coastal and Sun Belt distribution markets. With average asking rents below $7.00/SF NNN and a thin construction pipeline, the setup favors tenants who want to lock in affordable, well-located logistics space before the market tightens. Here’s what the data shows.
Market Snapshot: Q1 2026
| Metric | Q1 2026 | Context |
|---|---|---|
| Overall vacancy | ~7.0–7.5% | At national avg.; stabilizing |
| Avg. asking rent (NNN) | $6.90/SF | Firm; up from $6.80 in 2024 |
| Manufacturing rent | ~$6.40/SF | Affordable production space |
| Net absorption (2025 full-year) | +239K SF | Positive, led by NE submarket |
| Construction pipeline | Thin | Mostly pre-leased; spec muted |
| National industrial vacancy (Q1 2026) | 7.0% | Des Moines in line with national avg. |
Rent Trends: Stable and Affordable
Des Moines industrial rents have held remarkably steady, reflecting a market where neither oversupply nor demand shocks have created extreme pricing swings. Average asking rents at $6.90/SF NNN are firm — up modestly from $6.80 a year ago — supported by stable demand for modern logistics space and the elevated cost of new construction that keeps replacement rents well above existing asking rates.
The rent landscape varies meaningfully by property type: manufacturing buildings average around $6.40/SF, standard warehouse/distribution product runs $6.50–7.50/SF, and office/service industrial space commands approximately $9.40/SF. Modern Class A logistics product in the northeast corridor can push above $8.00/SF NNN. Compared to peer Midwest markets and national averages ($10.20/SF nationally), Des Moines offers a significant cost advantage for distribution operations.
For Tenants
Des Moines is one of the most affordable Midwest distribution markets with direct I-80/I-35 connectivity. Rents at $6.90/SF NNN are roughly 32% below the national average, and the thin construction pipeline means limited new competitive supply. For cost-sensitive distribution operations serving the Central U.S., Des Moines offers a compelling alternative to pricier Chicago, Kansas City, or Minneapolis locations. The northeast submarket has the best selection of modern product. Search Des Moines warehouse listings on WareCRE.
Construction Pipeline: Pre-Lease or Pause
Developers in Des Moines have shifted to a pre-lease-first approach, with speculative development meaningfully muted compared to the 2022–2024 cycle. The thin pipeline is allowing the market to gradually absorb existing vacancy without adding competitive pressure. Limited new construction and steady demand for functional second-generation space are helping stabilize fundamentals.
This conservative approach reflects both higher financing costs and the recognition that Des Moines’ market, while steady, doesn’t generate the absorption velocity needed to fill large spec buildings quickly. The result: vacancy is expected to decline through 2026 as larger available spaces find tenants and the pipeline remains constrained.
For Operators
The muted spec pipeline works in your favor. With developers requiring pre-leasing commitments and limited new competitive supply entering the market, existing owners and operators can hold rate and focus on tenant retention. Modern logistics product in the northeast corridor is performing well ahead of older inventory. Investment activity is selective but ongoing, with top-tier logistics assets commanding premium pricing.
Submarket Breakdown
Northeast (Altoona / Bondurant / Mitchellville)
The strongest submarket for industrial activity. The northeast corridor benefits from direct access to the I-80/I-35 interchange, available land for modern development, and proximity to major logistics infrastructure. This is where the largest recent leasing transactions have occurred, including Excell Marketing’s 175,000 SF sublease. Modern Class A product in this corridor commands the metro’s top rents at $7.50–8.50/SF NNN.
Southeast (Avondale / Carlisle)
A mix of manufacturing and distribution operations, with competitive pricing ($6.00–7.00/SF NNN). Good I-35 access for north-south distribution. Second-generation product provides affordable options for price-sensitive tenants.
Western Suburbs (West Des Moines / Waukee)
Uneven performance recently, with some vacancy pressure in this submarket. The western suburbs offer a mix of flex/light industrial and warehouse product, typically serving local service and distribution companies. Pricing runs $6.50–8.00/SF NNN depending on product quality.
Central/Downtown
Limited industrial inventory. Older product that faces competition from redevelopment pressure. Not the primary focus for logistics tenants, but small-bay and multi-tenant space serves local trades and service companies. CBD warehouse vacancy has been elevated.
| Submarket | Vacancy | Rent Range (NNN/SF) | Q1 2026 Profile |
|---|---|---|---|
| Northeast | Tightening | $7.50–$8.50 | Strongest activity, modern logistics |
| Southeast | Moderate | $6.00–$7.00 | Manufacturing, distribution, value |
| Western Suburbs | Elevated | $6.50–$8.00 | Flex/light industrial, uneven demand |
| Central/Downtown | Elevated | $5.50–$7.00 | Small-bay, older product, local service |
Co-Warehousing & Flexible Warehouse Space in Des Moines
Des Moines’ flexible warehouse market serves the metro’s growing small business economy and the logistics needs of Iowa’s agricultural and food processing industries. With small-bay demand remaining resilient even as the broader market digests new supply, co-warehousing operators fill a gap that traditional developers aren’t addressing.
Who’s leasing flexible space in Des Moines: E-commerce businesses leveraging Des Moines’ central distribution position, agricultural technology and ag-processing companies, insurance and financial services companies needing records storage and fulfillment, construction trades serving the metro’s residential growth, and food producers and distributors supporting the region’s farm-to-table supply chain.
Browse available co-warehousing and small-bay warehouse listings on WareCRE’s Des Moines marketplace.
Looking for warehouse space in Des Moines?
Key Trends to Watch
1. The I-80/I-35 Crossroads Advantage
Des Moines sits at the intersection of two of America’s most important freight corridors, providing two-day truck access to 85% of the U.S. population. As inland distribution hubs capture an increasing share of logistics activity nationally — inland markets absorbed the vast majority of Q1 2026 absorption per Cushman & Wakefield — Des Moines is positioned to benefit from the structural shift toward cost-effective central distribution. For broader context: Industrial Real Estate Trends & Outlook 2026.
2. Small-Bay Resilience
Small-bay demand in Des Moines has remained resilient through market cycles, reflecting the metro’s diversified SMB economy. While larger distribution spaces absorbed the brunt of vacancy increases from speculative deliveries, small-bay and multi-tenant product has maintained tighter fundamentals. This mirrors the national trend: Small-Bay vs. Big-Box: What the Vacancy Gap Means for Tenants and Operators.
3. Reshoring and Trade Dynamics
Des Moines’ central location makes it a potential beneficiary of reshoring and nearshoring trends as companies reconfigure supply chains in response to tariff uncertainty. Iowa’s strong manufacturing base, competitive labor costs, and central logistics position create a compelling proposition for companies moving production and distribution closer to U.S. consumers. Read more: How Tariffs Are Reshaping Warehouse Demand in 2026.
4. Flight to Quality Reshaping Demand
Modern logistics spaces with higher clear heights, efficient loading configurations, and energy-compliant building systems are leasing ahead of older product. Investment activity is selective, with top-tier logistics assets commanding premium pricing while older shallow-bay product trades at wider cap-rate spreads. This quality bifurcation will intensify as occupiers prioritize automation-ready facilities.
Outlook: What to Watch in Q2–Q3 2026
Des Moines’ industrial market is positioned for gradual improvement. The market entered 2026 on firmer footing, and the combination of muted spec construction, steady tenant demand, and owner-user activity should allow vacancy to compress modestly through the year.
Expect vacancy to decline toward the 6.5–7.0% range by year-end 2026 as larger available spaces find tenants and the pipeline remains thin. This is a market that recovers steadily rather than dramatically.
Rents should remain stable to slightly increasing, supported by limited competitive supply and elevated replacement costs. The northeast submarket will continue to see the strongest rent performance.
The biggest opportunity is for distribution operators who can take advantage of Des Moines’ central location at rents 30%+ below the national average. The metro is increasingly competitive for second-tier distribution hub strategies.
Find warehouse space in Des Moines
Browse co-warehousing, small-bay, and distribution listings across the Des Moines metro.
Data sources: Cushman & Wakefield Des Moines Industrial MarketBeat Q4 2025 & Q1 2026, Colliers Des Moines Industrial Market Report Q1 2026 & Q4 2025, JLL Des Moines Industrial Research, CBRE U.S. Industrial Figures Q1 2026, WareCRE marketplace data (May 2026).
Related Resources
Frequently Asked Questions
What is the current industrial vacancy rate in Des Moines?
Des Moines’ overall industrial vacancy is approximately 7.0–7.5% as of Q1 2026, roughly in line with the national average of 7.0%. The rate has stabilized after absorbing speculative deliveries and is expected to decline through 2026 as the thin construction pipeline allows the market to absorb existing availability.
How much does warehouse space cost in Des Moines?
Average asking rents are approximately $6.90/SF NNN as of Q1 2026 — roughly 32% below the national average of $10.20/SF. Rates range from ~$6.00/SF in the southeast for manufacturing space to $7.50–8.50/SF for modern Class A logistics product in the northeast corridor. Add NNN expenses for total occupancy costs.
Why choose Des Moines for warehouse distribution?
Des Moines sits at the intersection of I-80 and I-35, providing two-day truck access to 85% of the U.S. population. Combined with rents 30%+ below the national average, competitive labor costs, and Iowa’s business-friendly environment, Des Moines is increasingly attractive for cost-conscious distribution operations serving the Central U.S.
Which Des Moines submarket is best for warehouse space?
The northeast corridor (Altoona, Bondurant) is the strongest submarket for modern logistics activity, with the best selection of Class A product and direct I-80/I-35 access. The southeast offers value for manufacturing operations, while the western suburbs provide flex/light industrial options.
