Philadelphia Industrial & Warehouse Market Report | Q2 2026
Key Takeaways
- Philadelphia metro industrial vacancy fell to 10.3% in Q2 2026, down from 10.8% in Q1 and 11.1% a year earlier. The metro recorded its third consecutive quarter of positive net absorption, 1.6 million SF in Q2 and 3.9 million SF year to date.
- The average asking rent was $12.81/SF/yr net, flat on the year and about 24% above the U.S. average. Cushman & Wakefield ranks Philadelphia first nationally for five-year rent growth, at 96%.
- Construction picked up. The pipeline grew from 2.2 million SF in Q1 to 3.6 million SF in Q2 as developer confidence improved.
- Southern New Jersey accounts for 60.2% of year-to-date absorption. Philadelphia County has the metro’s highest warehouse rents, $15.36/SF/yr, and 13.0% vacancy.
Browse warehouse space for rent in Philadelphia
10.3%
Overall Vacancy (Q2 2026)
$12.81
Avg. Asking Rent ($/SF/yr net)
1.6M
SF Net Absorption (Q2 2026)
3.6M
SF Under Construction
Philadelphia’s industrial market kept improving in Q2 2026. Tenants signed 2.8 million SF of new leases, occupancy rose for a third straight quarter, and vacancy eased to 10.3%. Asking rents have leveled off after five years of rapid growth. Developers are starting to build again, lifting the pipeline to 3.6 million SF.
Geography: this report covers the Philadelphia metro as Cushman & Wakefield defines it: Philadelphia County; Lower Bucks, Upper Bucks, Montgomery, Chester and Delaware counties in Pennsylvania; and Burlington, Camden, Gloucester and Salem counties in Southern New Jersey (219.3 million SF). Northern Delaware is reported separately and is not in the metro totals. The Pennsylvania I-78/I-81 distribution corridor (Lehigh Valley, Central PA and Northeastern PA) is a separate market, covered in its own section below. Figures are from C&W’s Q2 2026 Philadelphia Industrial MarketBeat unless noted. Prior-quarter and year-ago comparisons use the figures as restated in C&W’s Q2 2026 U.S. Industrial MarketBeat tables. Rents are weighted net asking rents, quoted in $/SF/yr.
Market Snapshot: Q2 2026
| Metric | Q2 2026 | Q1 2026 (restated) | YoY or note |
|---|---|---|---|
| Overall vacancy | 10.3% | 10.8% | ↓80 bps YoY (11.1% in Q2 2025) |
| Overall asking rent ($/SF/yr net) | $12.81 | $12.86 | +0.2% YoY (from $12.78) |
| Warehouse/distribution asking rent ($/SF/yr) | $12.97 | n/a | Manufacturing $9.86 |
| Net absorption | 1.6M SF | 2.4M SF | 3.9M SF year to date |
| New leasing activity | 2.8M SF | n/a | 6.2M SF year to date; 10 leases over 100,000 SF in Q2 |
| Deliveries | Nearly 484,000 SF | n/a | 2.0M SF year to date |
| Under construction | 3.6M SF | 2.2M SF | Largest pipelines: Burlington and Philadelphia counties |
| Inventory | 219.3M SF | n/a | Excludes Northern Delaware (26.0M SF) |
Source: Cushman & Wakefield, Philadelphia Industrial MarketBeat Q2 2026. Q1 2026 and Q2 2025 values as restated in C&W’s U.S. Industrial MarketBeat Q2 2026 metro tables. n/a = not restated in the Q2 reports.
Rent Trends: Flat on the Year After 96% Growth in Five Years
The average net asking rent was $12.81/SF/yr in Q2 2026, compared with $12.86 in Q1 and $12.78 a year earlier. Warehouse/distribution space asks $12.97/SF/yr. The flat year follows a long run-up. C&W’s national report ranks Philadelphia first among U.S. markets for five-year rent growth, at 96%. Philadelphia now asks about 24% more than the U.S. average of $10.32/SF/yr.
Warehouse rents vary by county. Philadelphia County asks the most, $15.36/SF/yr, followed by Burlington County at $14.72 and Lower Bucks at $13.42. Gloucester County ($12.01) and Salem County ($11.70) are the lowest-cost options in the metro. C&W expects asking rents to stay steady for the rest of the year.
For Tenants
Negotiating room is uneven. Burlington County (4.0% vacancy) and Lower Bucks County (6.3%) are tight. Philadelphia County (13.0%), Chester County (13.3%) and Gloucester County (13.8%) have far more space on the market, and Salem County is at 37.2% after new speculative deliveries. Rents are flat, so tenants in the higher-vacancy counties can push for concessions. Search Philadelphia warehouse listings on WareCRE.
Construction Pipeline: 3.6M SF Underway as Starts Pick Up
Space under construction rose from 2.2 million SF in Q1 to 3.6 million SF in Q2 2026. C&W attributes the increase to improving developer confidence and more construction starts. Philadelphia County (1.5 million SF) and Burlington County (988,478 SF) have the largest pipelines, and Salem County has 700,000 SF underway.
Deliveries were modest. Nearly 484,000 SF completed in Q2, all in Upper Bucks and Salem counties, bringing the year-to-date total to 2.0 million SF. The largest completion this year is Hilco Redevelopment’s 727,272 SF speculative building at 3144 West Passyunk Avenue in Philadelphia.
For Operators
Absorption is positive and vacancy is falling, but rents have stopped rising. Owners in Burlington and Lower Bucks counties, where vacancy is lowest, are best placed to hold rate. In Philadelphia County, a 1.5 million SF pipeline will compete with 13.0% vacancy. In Salem County, 700,000 SF is under construction on top of 37.2% vacancy. Expect lease-up in those areas to take longer.
Submarket Breakdown
C&W reports the Philadelphia metro by county. The Pennsylvania counties, including the city (108.6 million SF), are at 10.1% vacancy and Southern New Jersey (110.7 million SF) at 10.4%. The four counties below are the largest by inventory.
Burlington County, NJ
The metro’s largest county at 55.5 million SF and its tightest major submarket, with 4.0% vacancy. Warehouse space asks $14.72/SF/yr. Burlington absorbed 1.9 million SF year to date, the most in the metro, and has 988,478 SF under construction. Elogistics’ 429,200 SF lease at 1775 Route 38 was one of the quarter’s key deals.
Philadelphia County
The city itself, 30.1 million SF of infill industrial space near the Port of Philadelphia and the I-95 corridor. Vacancy is 13.0% and warehouse rents are the highest in the metro at $15.36/SF/yr. The county absorbed 957,821 SF year to date and has 1.5 million SF under construction. Mitsubishi Electric’s 489,701 SF lease at 2951 Orthodox Street was the quarter’s largest key lease.
Gloucester County, NJ
A 29.6 million SF South Jersey submarket with 13.8% vacancy and warehouse rents of $12.01/SF/yr. It posted negative absorption of 452,330 SF year to date and has no space under construction, so its availability will come down only as existing space leases.
Lower Bucks County
A 26.7 million SF submarket in Bucks County, Pennsylvania, northeast of the city. It recorded the largest vacancy improvement in the metro, falling 500 bps year over year to 6.3%, on 1.2 million SF of absorption year to date. Warehouse space asks $13.42/SF/yr, and nothing is under construction. HD Supply renewed 384,000 SF at 33 Runway Road in Q2.
| Submarket | Vacancy | W/D Asking Rent ($/SF/yr net) | YTD Net Absorption (SF) | Under Construction (SF) |
|---|---|---|---|---|
| Burlington County, NJ | 4.0% | $14.72 | 1,921,322 | 988,478 |
| Philadelphia County | 13.0% | $15.36 | 957,821 | 1,503,552 |
| Gloucester County, NJ | 13.8% | $12.01 | -452,330 | 0 |
| Lower Bucks County | 6.3% | $13.42 | 1,205,911 | 0 |
| Montgomery County | 8.6% | $12.35 | -109,835 | 0 |
| Salem County, NJ | 37.2% | $11.70 | 688,775 | 700,000 |
| Pennsylvania counties total (C&W: Suburban Philadelphia) | 10.1% | $13.74 | 1,557,522 | 1,607,982 |
| Southern New Jersey total | 10.4% | $12.24 | 2,353,783 | 1,955,867 |
| Philadelphia metro total | 10.3% | $12.97 | 3,911,305 | 3,563,849 |
Source: Cushman & Wakefield, Philadelphia Industrial MarketBeat Q2 2026, market statistics table. Upper Bucks, Chester, Delaware (PA) and Camden counties are included in the totals but not shown. Northern Delaware (6.9% vacancy) is reported separately and excluded from the metro total.
The Pennsylvania I-78/I-81 Corridor: 7.4% Vacancy, Rents 29% Below Philadelphia
Many occupiers searching for Philadelphia-area distribution space also look at the Pennsylvania I-78/I-81 corridor. C&W reports it as a separate market of 466.1 million SF, more than twice the size of the Philadelphia metro. It covers Pennsylvania only. New Jersey’s markets, including its I-78 corridor, are reported separately.
The corridor’s vacancy rose 10 bps in Q2 to 7.4%. Net absorption was 5.2 million SF in Q2 and 7.5 million SF year to date, and leasing totaled 5.5 million SF. The overall asking rent is $9.11/SF/yr, about 29% below the Philadelphia metro. The pipeline held roughly steady at 14.1 million SF, including 2.5 million SF build-to-suit, as 5.7 million SF of new starts largely offset 6.2 million SF of Q2 deliveries. The largest key lease C&W lists for Q2 was Keurig’s 1,223,220 SF at 600 Killinger Road in the Split submarket.
| Corridor Submarket | Vacancy | W/D Asking Rent ($/SF/yr net) | YTD Net Absorption (SF) | Under Construction (SF) |
|---|---|---|---|---|
| Lehigh Valley | 8.3% | $11.87 | 1,257,254 | 3,337,158 |
| Central PA | 7.3% | $8.97 | 1,392,770 | 1,823,665 |
| Northeastern PA | 7.1% | $7.79 | 86,128 | 2,292,500 |
| Split | 6.5% | $8.42 | 2,393,848 | 5,392,756 |
| I-81S | 7.5% | $6.93 | 2,374,212 | 1,300,000 |
| Corridor total | 7.4% | $9.15 | 7,504,212 | 14,146,079 |
Source: Cushman & Wakefield, PA I-81/I-78/I-81S Industrial MarketBeat Q2 2026, market statistics table. Overall asking rent ($9.11) from the report’s market fundamentals summary.
Co-Warehousing & Flexible Warehouse Space in Philadelphia
Big-box logistics drives Philadelphia’s headline numbers. Small-bay and flex space near the city and inner suburbs serves businesses that need operational space close to customers without a large-format commitment. C&W reports office/service space in the metro asking $11.63/SF/yr.
Philadelphia’s flexible-space tenants include last-mile and e-commerce operators serving the Northeast, importers moving goods through the Port of Philadelphia, and 3PLs that need scalable space near the I-95, I-76 and turnpike network. Contractors and food and beverage distributors also lease small bays here.
Browse available co-warehousing and small-bay warehouse listings on WareCRE’s Philadelphia marketplace.
Looking for warehouse space in Philadelphia?
Key Trends to Watch
1. Southern New Jersey Is Carrying Absorption
Southern New Jersey accounts for 60.2% of the metro’s 3.9 million SF of year-to-date absorption, led by Burlington County. Year-to-date leasing is split almost evenly between Southeastern Pennsylvania and Southern New Jersey, but New Jersey has converted more of it into occupancy. For broader context: Industrial Real Estate Trends & Outlook 2026.
2. Philadelphia County and Lower Bucks Drove the Latest Vacancy Drop
C&W says Philadelphia County and Lower Bucks County drove the most recent drop in vacancy. Philadelphia County also landed the quarter’s largest key lease and the year’s largest completion. The county’s 13.0% vacancy and 1.5 million SF pipeline mean the recovery there still has a long way to go. Read more: Small-Bay vs. Big-Box: What the Vacancy Gap Means in 2026.
3. Key Q2 Sales Ranged From $106 to $255 per SF
C&W’s key Q2 sales show where pricing sits. Faropoint bought 442 Creamery Way in Philadelphia County, 572,768 SF, from Link Logistics for $91.0M, or $158.01/SF. In Gloucester County, Centennial Plastics paid $14.0M ($254.55/SF) for 509 Heron Drive, and in Montgomery County, 601 Davisville Road (98,600 SF) sold for $10.5M, or $106.49/SF. These individual deals do not represent a market average. C&W’s MarketBeat does not publish a Philadelphia cap rate.
Outlook: What to Watch in Q4 2026
C&W’s Q3 2026 MarketBeats are due in mid-October, with the year-end release to follow. They will show whether Philadelphia’s recovery broadens beyond a few counties.
Watch whether absorption stays positive for a fourth quarter. Three straight positive quarters have taken vacancy from 11.9% in Q3 2025 to 10.3%.
C&W expects asking rents to remain steady through year-end. Watch Philadelphia County and Gloucester County, where vacancy is highest among the four largest counties, for the first signs of rent cuts.
Watch new starts. The pipeline grew by 1.4 million SF in one quarter, and if starts keep rising, vacancy gains in the city and Salem County could stall.
Find warehouse space in Philadelphia
Browse co-warehousing, small-bay, and distribution listings across the Philadelphia metro.
Data sources: Cushman & Wakefield Philadelphia Industrial MarketBeat Q2 2026 (headline, county and transaction figures; rents weighted net asking, $/SF/yr); Cushman & Wakefield PA I-81/I-78/I-81S Industrial MarketBeat Q2 2026 (corridor section); Cushman & Wakefield U.S. Industrial MarketBeat Q2 2026 (restated Q1 2026, Q4 2025 and Q2 2025 figures, U.S. averages and five-year rent growth). Each report reflects the most recent vacancy, rental, and construction data available at the time of publication. We refresh our reports as new market data is released, and we’re continually expanding coverage to additional metros.
Related Resources
Frequently Asked Questions
What is the current industrial vacancy rate in Philadelphia?
Philadelphia metro industrial vacancy was 10.3% in Q2 2026, according to Cushman & Wakefield, down from 10.8% in Q1 and 11.1% a year earlier. The Pennsylvania counties, including the city, were at 10.1% and Southern New Jersey at 10.4%. The separate Pennsylvania I-78/I-81 corridor was at 7.4%.
How much does warehouse space cost in Philadelphia?
The overall average asking rent was $12.81/SF/yr net in Q2 2026, and warehouse/distribution space averaged $12.97/SF/yr. Warehouse rents range from $11.70/SF/yr in Salem County to $15.36/SF/yr in Philadelphia County. The Pennsylvania I-78/I-81 corridor averages $9.11/SF/yr.
Which Philadelphia-area submarket is best for warehouse space?
It depends on the requirement. Burlington County, NJ is the largest and tightest major submarket at 4.0% vacancy. Philadelphia County offers infill access but has the highest rents, $15.36/SF/yr, and 13.0% vacancy. Gloucester County has more availability at $12.01/SF/yr. For big-box space at lower rents, the Pennsylvania I-78/I-81 corridor averages $9.11/SF/yr.
How much industrial space is under construction in Philadelphia?
3.6 million SF was under construction in the Philadelphia metro at the end of Q2 2026, up from 2.2 million SF in Q1. Philadelphia County has 1.5 million SF underway. The Pennsylvania I-78/I-81 corridor has a further 14.1 million SF under construction.
What are the Philadelphia industrial market trends in 2026?
Occupancy is recovering and rents have leveled off. The metro recorded 3.9 million SF of net absorption in the first half, its third straight positive quarter, and vacancy fell to 10.3%. Rents are flat on the year after 96% growth over five years, the most of any U.S. market in C&W’s national report.
