Texas industrial entered 2026 in the longest absorption cycle in state history — and Q2 results confirm that cycle is decelerating but not breaking. Net absorption across the four major metros came in positive but soft, vacancy ticked up modestly, and the deals that are closing are increasingly bifurcated: trophy infill sub-100K SF blocks are still tight, while bulk distribution in outlying submarkets is the loosest it's been in five years.
This report walks through the rent, cap rate, vacancy, and absorption numbers metro-by-metro, with commentary on the deals CRECO has been in the room for this quarter. It's the same view we share with our institutional and private investor clients on quarterly calls.
Headline reads: small-bay warehouse remains a landlord market in primary infill submarkets; bulk distribution has flipped to a tenant market in outlying submarkets; flex with quality office buildout is the most-sought product across all four metros.
Executive summary — Q2 2026 in five numbers
Texas industrial fundamentals at the end of Q2 2026 are best described as bifurcated. Trophy small-bay and infill product remains tight; bulk and outlying product is soft and softening. The blended numbers obscure the divergence — read them at the submarket level, not the metro level.
- Statewide industrial vacancy: 7.4% (up 60 bps YoY) — but range across submarkets is 3.2% to 14.8%
- YoY net absorption: positive 38M SF across the four metros, down from 52M SF in 2025
- Average asking rent for small-bay warehouse (20K-60K SF): $11.40/SF NNN in primary submarkets, $9.20/SF in secondary
- Average asking rent for bulk distribution (200K+ SF): $6.80/SF NNN, down from $7.20/SF a year ago
- Cap rates on stabilized Class A industrial: 6.5%-7.5% in primary, 7.5%-8.5% in secondary, with bid-ask spread still wider than 2024 levels
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What you'll walk away with:
- Current rents by submarket — small-bay warehouse, large distribution, and flex
- Cap rate evidence from Q2 2026 closed transactions across the four metros
- Vacancy and absorption data, with commentary on what it means for pricing
- Construction pipeline by metro — where new supply is about to land, where it isn't
- A practical view of where owners and tenants have the leverage right now
What's in the rest of the report
- Rents by submarket and product type
- Cap rates — what actually traded in Q2 2026
- Absorption and the construction pipeline
- Metro-by-metro commentary
- What we're telling clients