Industrial & Cold Storage REITs: Q2'26 Earnings Preview + Takeaways from Our Q2 Update w/ JLL

Research evidence excerpt

Industrial & Cold Storage REITs: Q2'26 Earnings Preview + Takeaways from Our Q2 Update w/ JLL

Industrial & Cold Storage REITs: Q2'26 Earnings Preview + Takeaways from Our Q2 Update w/ JLL Equity Research

numerous available options. Vacancy is projected to approach ~5.0% by YE’26, supported by strong absorption trends and minimal new

deliveries. New leasing reached 7.8MSF in Q2, down 12.3% from the prior 8-quarter average, but still elevated compared to historical

norms. New Class A leasing reached 11MSF during 1H’26, up ~17% from ’25 levels. Asia-based 3PLs remained the primary driver of

activity, accounting for ~34% of new Class A leasing through 1H’26. Class A asking rents were stable y/y at $16.56/SF, while Class B/C

rents were down ~3.3% over the past 12 months. Asking rents are expected to remain stable though require continued monitoring given

ongoing macro challenges. Construction pipeline remains constrained at a modest 6.8MSF with ~15.7% pre-leased.

Southern California: Total vacancy appears to have stabilized at ~8% with net absorption outpacing deliveries for the first time in 4 years.

Q2 was SoCal’s best quarter of new leasing since 2020, led by infill submarkets with demand trending upward. Activity was noted to be

strong throughout the region from Inland Empire to LA to SD. While cost saving and consolidation had hampered activity in recent years,

top-line growth emerged as the top motivation for new leases with large block Class A also having turned a corner, converging with Class B

activity. New market activity saw the best quarter ever, and Inland Empire saw an Influx of Big-Box demand. Tenants in the market continue

to hold despite macro uncertainties. Class A availability has been rapidly declining in various markets, laying the foundation for a rent