--- title: "Industrial rents are still rising. The premium on new leases is not what it was." description: "Yardi Matrix reports U.S. industrial in-place rents up 5.4 percent to $9.31 a square foot, but new leases now sign just 88 cents above in-place rents, down from $2.45 two years ago. If an industrial OM leans on a big mark-to-market at rollover, check it against your submarket's signed leases." canonical: "https://acquios.ai/blog-industrial-new-lease-premium-shrinking" category: "Market Commentary" tags: ["Industrial"] last-updated: "2026-10-05" site: "AcquiOS" --- # Industrial rents are still rising. The premium on new leases is not what it was. > Yardi Matrix reports U.S. industrial in-place rents up 5.4 percent to $9.31 a square foot, but new leases now sign just 88 cents above in-place rents, down from $2.45 two years ago. If an industrial OM leans on a big mark-to-market at rollover, check it against your submarket's signed leases. Yardi Matrix reports U.S. industrial in-place rents up 5.4 percent to $9.31 a square foot, but new leases now sign just 88 cents above in-place rents, down from $2.45 two years ago. If an industrial OM leans on a big mark-to-market at rollover, check it against your submarket's signed leases. Many industrial acquisitions that clear an investment committee, or IC, lean at least partly on one idea: the tenants pay less than their space would rent for today, so when their leases expire, rent resets higher and income grows. Brokers call this the mark-to-market (the gap between what tenants pay now and what the same space would lease for at current market rents). For several years it was the easiest part of the pitch to believe, because new leases were signing well above in-place rents almost everywhere. Yardi Matrix's September 2026 national industrial report, published September 30 and summarized by CRE Daily on October 1, shows how much that gap has narrowed. National in-place rents (the average rent on leases already signed and running) reached $9.31 a square foot in August, up 6 cents from July and 5.4 percent from a year earlier. Leases signed over the past 12 months averaged $10.19, a premium of just 88 cents. That premium was $1.43 a year ago and $2.45 two years ago. Rents are still rising, but the room between old leases and new ones has shrunk by roughly two thirds since 2024. ## What the 88-cent spread actually measures Be precise about what this number is before you lean on it. Yardi's premium is the gap between the average rent on leases signed over the past 12 months and the national average in-place rent. Both are market-wide averages, so it is not a same-building re-leasing spread, and it can move when the mix of new leases shifts toward bigger, newer, or cheaper buildings. Even so, it is a useful public stand-in for the question your rollover assumption is really asking: how much more will a tenant pay when the lease comes up? The national figure also hides a wide range between markets. Bridgeport had the largest premium at $3.52 a square foot, followed by Boston at $3.02 and Miami at $2.97, and CRE Daily's summary adds Nashville at $2.52 and Dallas at $2.33. With those markets well above 88 cents, others must sit below the national figure, which means a building in a weaker submarket may have very little mark-to-market left. ## Why the premium shrank The shrinking gap is mostly the delayed bill for the largest supply wave the sector has seen. Developers started 1.5 billion square feet of industrial space from 2020 to 2022, according to Yardi, and that space has been delivering into markets where demand held up but could not absorb it all at the old pace. National vacancy is now 9.3 percent, up 60 basis points (a basis point is one hundredth of a percent) from a year earlier, and landlords with empty space have less bargaining power. Seattle shows the pattern. Its vacancy has climbed 500 basis points in two years to 13.6 percent after 44.2 million square feet of deliveries since 2020, equal to 14.1 percent of its stock, and rents there grew only 4.5 percent. Several Sun Belt and East Coast markets have held up better: Atlanta led major markets with 7.9 percent annual rent growth, New Jersey and Miami followed at 7.6 percent, and Dallas posted 7.5 percent. At the slow end, CRE Daily's summary lists Denver at 2.1 percent, Detroit at 2.7 percent, and Memphis at 3.0 percent. The national average blends all of these. It is context, not a substitute for your own market's data. ## Run the dollars on rollover Here is how the change shows up in a model. Take an illustrative 250,000-square-foot warehouse where every lease rolls during your hold, leased on a triple-net basis (the tenant pays taxes, insurance, and most operating costs, so rent changes flow largely to [net operating income, or NOI](https://acquios.ai/what-is-noi-commercial-real-estate) (income after operating expenses, before debt service)). Apply the national averages to it as a simple test. At the 2024 spread of $2.45 a square foot, rollover adds about $612,500 a year of rent. At today's 88 cents, it adds about $220,000. That is roughly $392,500 less income a year from the same building. The value effect is larger than the income gap. At an illustrative 6 percent [cap rate](https://acquios.ai/what-is-cap-rate) (NOI divided by purchase price), $392,500 of NOI is worth about $6.5 million. If the offering memorandum, or OM (the broker's marketing package for a sale) still carries a rollover premium priced off the 2024 market, that is how much value the pitch may be carrying that today's signed leases do not support. Your numbers will differ, but the arithmetic is the same, and it is worth doing before you send a letter of intent. Timing matters too. A thin premium does more than shrink the bump at rollover. It makes downtime, leasing commissions, and free rent a bigger share of the economics, because there is less new income to pay for them. The same months of vacancy and the same commission check take longer to earn back, and in a soft submarket they can eat most of the gain. ## Your submarket, not the national average None of this means industrial rent growth is over. In-place rents are still up 5.4 percent, e-commerce reached a record 20.2 percent of core retail sales in the second quarter according to Census Bureau data cited by Yardi, and investors bought $60.5 billion of industrial property through August at an average of $138 a square foot. The issue is narrower: the gap between old and new leases is no longer wide enough everywhere to carry a deal on its own. Supply is also returning in some of the markets that still show a healthy premium. Dallas leads the country with 37.3 million square feet under construction, and Phoenix has a pipeline equal to 6.8 percent of its stock. Nationally, 446.9 million square feet is underway, about 2.1 percent of stock, and about 230 million square feet of starts so far put 2026 on pace for the most since 2022. A premium that exists today in a market with a large pipeline may not be there when your tenant's lease expires in three years. That is why the rollover assumption belongs in your underwriting built from evidence, not copied from the OM's market rent line. Go through the [rent roll](https://acquios.ai/blog-rent-roll-analysis) (the lease-by-lease list of tenants, rents, and expiration dates), check each expiring lease against recent signed deals for similar buildings in the same submarket, and test what happens to returns and your exit cap rate (the rate the next buyer will use to value the property when you sell) if the premium narrows further. AcquiOS can help with the grind without making the call for you. It moves the OM, the T-12 (the trailing twelve months of a property's actual income and expenses), and the rent roll into your team's existing Excel template with source citations, so analysts spend their time testing the rollover assumption instead of retyping lease schedules. AcquiScore can mark Proceed, Caution, or Pass against your written screens once the file is built. Whether an 88-cent market supports the seller's rollover story is still your team's call. ## What to do this week Pick one industrial OM on your desk and find the line where the broker assumes market rent at rollover. Compare it with in-place rents on the rent roll and with recent signed leases in that submarket, then rerun the model at a premium closer to today's national 88 cents and at your submarket's actual figure. If the deal only works at the 2024 spread, say so in the memo and price it accordingly. ## Frequently Asked Questions ### What is the new-lease premium in industrial real estate? It is the gap between the average rent on recently signed leases and the average in-place rent. Yardi Matrix reports that leases signed over the 12 months through August 2026 averaged $10.19 a square foot, 88 cents above the $9.31 national in-place average, down from $1.43 a year earlier and $2.45 two years earlier. ### Are industrial rents still rising in 2026? Yes. National in-place rents rose 5.4 percent from a year earlier to $9.31 a square foot in August 2026, led by Atlanta at 7.9 percent and New Jersey and Miami at 7.6 percent. Vacancy also rose 60 basis points to 9.3 percent, so rent growth and landlords' bargaining power are moving in different directions. ### How should I underwrite mark-to-market on an industrial acquisition? Build it lease by lease from the rent roll. Compare each expiring lease with recent signed leases for similar space in the same submarket, include downtime, leasing commissions, and free rent, and test the result at a narrower premium. The national 88-cent figure is a reference point, not your market rent. ### How does AcquiOS help with industrial rollover assumptions? AcquiOS moves the OM, T-12, and rent roll into your team's existing Excel template with source citations, so your team can test each lease's rollover against market evidence instead of retyping schedules. It speeds up the file and shows where each number came from. Your team still decides what market rent is. - [$12.73 billion of industrial CMBS looks fine on paper. The lease may expire first.](https://acquios.ai/blog-industrial-cmbs-lease-rollover-before-maturity) - [Coca-Cola lined up $10 billion for U.S. plants and warehouses. Tenant demand is not the underwriting.](https://acquios.ai/blog-coca-cola-10b-plants-not-underwriting) - [Industrial CRE Underwriting Software](https://acquios.ai/industrial-cre-underwriting-software) - [What Is Loss to Lease in Real Estate?](https://acquios.ai/blog-what-is-loss-to-lease) ## Ready to see AI underwriting on a real deal? Book a demo and bring an OM you are working on. We will run it live and show you model output in your template in under two minutes. --- AcquiOS is an acquisitions operating system for commercial real estate. 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