Industrial Leasing Is Rebounding — What Puget Sound Activity Signals for Boise Commercial Real Estate
Industrial real estate doesn’t always turn all at once.
Sometimes, the early signals show up in how space is leased—not just how much.
And right now, a shift in the Puget Sound region is offering a clear preview of where things may be heading for Boise commercial real estate.
According to reporting by Elliott Krivenko in CoStar Analytics (read the original article here: https://product.costar.com/home/news/1129607857), industrial leasing activity across the Seattle-area market picked up meaningfully in early 2026—after a slower stretch last year.
What’s Changing: Leasing Activity Is Picking Back Up—But Differently
At a high level, demand is returning.
But the structure of that demand has changed.
Key data points:
- Roughly 3 million square feet leased in the first quarter
- About a 25% increase year-over-year
- Total leases signed increased by around 6%
- Average lease size climbed to nearly 14,000 square feet
That all sounds like a strong rebound.
But here’s the real story:
This growth is not being driven by massive warehouse deals.
Instead, it’s coming from the middle of the market.
- The 100,000 to 200,000 square foot range made up a major share of activity
- The 50,000 to 100,000 square foot segment saw the biggest year-over-year growth
Meanwhile, the largest users—the ones taking 200,000+ square feet—are still moving cautiously.
Why It Matters: The “Middle Market” Is Driving Industrial Demand
This shift matters more than it might seem.
For years, industrial headlines were dominated by:
- Massive distribution centers
- Big-box logistics users
- National tenants taking huge footprints
Now, the momentum is coming from:
- Regional distributors
- Growing local businesses
- Mid-sized logistics users
These tenants are:
- Expanding carefully
- Taking space in increments, not leaps
- Prioritizing flexibility over scale
At the same time, there’s still a significant amount of available space, especially in newer buildings.
In fact, vacancy in recently built properties remains elevated—particularly in large-format facilities.
So even with leasing improving, the market is still working through excess supply.
Local Market Impact: Boise Is Already Seeing This Play Out
If you’re active in Boise industrial real estate, this trend should look familiar.
We’re seeing similar patterns across the Treasure Valley:
1. Mid-Sized Users Are Leading the Market
Deals in the 20,000 to 100,000 square foot range are becoming the most active segment.
That includes:
- Local service companies
- Light industrial users
- Regional distribution operators
2. Large-Bay Space Is Taking Longer to Absorb
Just like in Seattle, bigger buildings—especially newer product—can sit longer without the right tenant.
That’s creating:
- More negotiation leverage for tenants
- Pressure on landlords to stay competitive
3. Availability Is Creating Opportunity
Higher vacancy isn’t always bad.
For tenants, it means:
- More options
- Better lease terms
- Ability to upgrade space
For investors and developers, it means:
- Being more strategic about unit size and design
- Focusing on what the market is actually absorbing—not just what’s easy to build
Key Takeaways for Boise Investors, Landlords, and Tenants
- Industrial demand is recovering—but not evenly across all sizes
- The mid-bay segment is the most active and resilient
- Large-box vacancy may remain elevated longer than expected
- Tenant leverage is improving in certain parts of the market
- Product type and sizing matter more than ever
My Take: Build and Lease for the Middle, Not the Extremes
If you’re developing or leasing industrial space in Boise right now, this is the key question:
Are you aligned with where demand actually is?
Because right now, the market is telling us:
- Not too small
- Not too big
- Right in the middle
That’s where deals are getting done.
The developers and landlords who adjust to that reality—by designing flexible, mid-sized spaces—are going to outperform.
And tenants who understand this moment can lock in better deals while supply is still elevated.
What’s happening in Puget Sound isn’t just a regional story.
It’s a leading indicator.
And for Boise commercial real estate, it’s a signal worth paying close attention to.
Mike Gioioso (joy-OH-so) has for 16+ years been helping companies of all sizes buy, build, and lease perfect places for business in greater Boise, Idaho and beyond.
www.streetsmartidaho.com mike@streetsmartidaho.com 208-209-9166
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