Industrial Real Estate Availability Surges Dramatically as Warehouse Market Tumbles, Hughes Marino Reports

Industrial real estate has entered 2026 in what Hughes Marino describes as near free-fall conditions, with national warehouse availability surging dramatically across major U.S. markets. The commercial real estate advisory firm reports that industrial availability has increased significantly since 2020, with some markets experiencing increases of more than 240%.

The firm published its analysis in a February 2026 market report, warning that industrial landlords and their brokers have been obscuring market conditions by publishing asking rents that have not changed materially since 2023 or listing properties with rents shown as "withheld" or "negotiable."

Industrial Real Estate Availability Spikes Across Major Markets

Hughes Marino's analysis comparing industrial availability in major U.S. markets from January 2020 to January 2026 reveals dramatic increases in warehouse real estate supply. Dallas, Denver, Atlanta, Phoenix and Boston are at 150% of their 2020 levels. California markets including San Diego, Los Angeles, the Inland Empire and San Francisco, along with Salt Lake City, have doubled their 2020 starting points.

The most severe increases occurred in Seattle, Raleigh-Durham and Orange County, California, which started 2026 at 225%, 237% and 241% of their 2020 levels respectively. Only Chicago at 19%, Houston at 22% and Charlotte at 38% have avoided being overwhelmed by the surge in available industrial space.

According to Hughes Marino, commercial developers have added 1.2 billion square feet of industrial space in recent years—construction that would normally occur over decades compressed into just a few years. The firm had predicted this market shift in its industrial market reports as early as 2023, though the current situation has exceeded even those projections.

Oversupply Driven by Multiple Factors

Hughes Marino notes that much of the availability spike is driven by excessive new construction nationally, but businesses are also retrenching due to overcommitments made between 2021 and 2022. Tenants are responding to the slowdown of imports in 2025, further adding to available warehouse real estate inventory.

The surge in availability includes new construction sitting vacant, subleases languishing on the market, and second-generation space coming back to market due to massive downsizings.

Landlord Reporting Practices Under Scrutiny

The firm criticizes landlord listing brokers for presenting quarter-over-quarter numbers that make vacancy increases appear nominal while excluding sublease space, space on the market for lease but not yet vacant, and buildings under construction from their reported figures. Hughes Marino describes this practice as "pulling the wool over commercial tenants' eyes."

Market Implications for Industrial Tenants

The dramatic increase in warehouse real estate availability represents a significant shift in market leverage from landlords to tenants. While industrial rents peaked between 2021 and 2023, the current oversupply conditions suggest substantial opportunities for tenants to negotiate more favorable lease terms.

Hughes Marino's report indicates that market conditions have changed "not just on the margin, but radically" in terms of how much industrial space is available nationally. The firm's early warnings about these market shifts, dating back to 2023, have proven prescient as the industrial real estate sector enters what the firm characterizes as a tumultuous period.

The national industrial market's trajectory from peak rents in 2021-2023 to the current oversupply conditions marks one of the most significant shifts in commercial real estate market dynamics in recent years, with implications for landlords, tenants, and investors across the warehouse and distribution sector.