The East Bay industrial market in Q2 2026 remained challenged by elevated vacancy and negative absorption, though leasing activity stayed active and investment sales volume increased significantly year-over-year. Limited new construction deliveries and a relatively modest development pipeline continue to support long-term market fundamentals as occupiers adjust to changing space needs. Explore our full East Bay industrial market report for detailed insights on vacancy trends, leasing activity, development, and investment performance.
Frequently Asked Questions
What is the East Bay industrial vacancy rate in 2Q 2026?
The East Bay industrial direct vacancy rate reached 8.7% in 2Q 2026, up 60 basis points from 8.1% one year ago, according to Kidder Mathews research. Total availability rate rose slightly to 11.3%, up 10 basis points year-over-year, as occupiers continue right-sizing their space needs.
How much industrial space did the East Bay market absorb in 2Q 2026?
Net absorption totaled negative 731,249 SF in 2Q 2026 and negative 913,625 SF year-to-date, though this is an improvement from negative 1,303,521 SF absorbed over the same period in 2025 (Data source: CoStar). Negative net absorption means more space was vacated than newly occupied during the period.
What are current East Bay industrial asking rents?
The average direct asking lease rate was $1.44 per SF per month (NNN) in 2Q 2026, down 13.0% from $1.66 a year earlier, according to Kidder Mathews research. Rents across most submarkets ranged from $1.23 PSF in Alameda to $1.85 PSF in Berkeley/Albany.
How much industrial leasing activity took place in East Bay in 2Q 2026?
Leasing activity totaled 2,346,032 SF in 2Q 2026 and 4,631,101 SF year-to-date, down 7.7% from 5,019,508 SF over the same period in 2025 (Data source: CoStar). Fremont/Newark led all submarkets with 929,008 SF of quarterly leasing activity.
What was the largest industrial sale in East Bay in 2Q 2026?
The largest industrial sale of the quarter was 49000 Milmont Dr in Fremont, a 267,099-SF building that sold for $132,300,000 ($495.32/SF), according to Kidder Mathews research. Clarion Partners purchased the property from Hines and Oaktree Capital Management.
What was the largest industrial lease signed in East Bay in 2Q 2026?
The largest lease of the quarter was 7411 Central Ave in Newark, where Quanta Manufacturing leased 143,000 SF from Pearlmark Real Estate in June 2026, according to Kidder Mathews research. Quanta Computer also signed a 100,000-SF lease in Fremont the same month.
How much industrial space is under construction in East Bay?
512,419 SF was under construction as of 2Q 2026, up 109.0% from 245,189 SF a year earlier, even as no new space was delivered this quarter, according to Kidder Mathews research. The largest active project is Campus @ Bayside in Fremont, a 258,472-SF manufacturing facility slated for delivery in 3Q 2026.
How does East Bay industrial investment sales activity compare year-over-year?
Industrial sales volume reached 2,774,213 SF year-to-date through 2Q 2026, an 84.3% increase from 1,505,033 SF over the same period in 2025, according to Kidder Mathews research (Data source: CoStar). The increase signals renewed investor interest in East Bay industrial assets despite softer occupancy fundamentals.
Which East Bay submarket has the highest industrial vacancy?
Berkeley/Albany posted the highest total vacancy rate at 17.0% in 2Q 2026, according to Kidder Mathews research, while Fremont/Newark posted the lowest at 7.3%. Fremont/Newark was also the market’s strongest performer for leasing activity and net absorption during the quarter.
What is the outlook for the East Bay industrial market?
The East Bay industrial market remains challenged by elevated vacancy and negative net absorption, though improving conditions relative to 2025 and active leasing activity point to gradual stabilization, according to Kidder Mathews research. A limited construction pipeline and minimal new deliveries should help constrain future supply growth as the market adjusts.
Last updated: 2Q 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.
2Q 2026 East Bay Industrial Market: Key Data Points
Explore our full East Bay industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy Rates Trend Higher: The East Bay industrial direct vacancy rate reached 8.7% in Q2 2026, up 60 basis points from one year ago as occupiers continue to right-size space requirements.
- Leasing Activity Remains Active: Industrial leasing totaled 4.6M SF year-to-date, demonstrating continued tenant demand despite a slower market environment.
- Negative Absorption Improves Year-Over-Year: Net absorption totaled negative 913,625 SF year-to-date, improving from negative 1.3M SF during the same period last year.
- Construction Pipeline Remains Limited: Only 512,419 SF was under construction at quarter-end, helping constrain future supply growth across the East Bay industrial market.
- Rental Rates Adjust to Market Conditions: Average asking rents measured $1.44 PSF NNN per month, down 13.0% year-over-year as landlords adapt to evolving market dynamics.
- Investment Sales Volume Surges: Industrial sales volume reached 2.8M SF year-to-date, an 84.3% increase from the prior year, signaling renewed investor interest in East Bay industrial assets.
East Bay Industrial Submarket Statistics
| Submarket | Total Inventory (SF) |
SF Under Construction |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
2Q26 Direct Net Absorption (SF) |
2Q26 Leasing Activity (SF) |
Direct Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Richmond | 18,085,108 | 0 | 9.4% | 9.9% | 9.5% | -12,965 | 157,350 | $1.48 |
| Berkeley/Albany | 8,265,861 | 0 | 16.3% | 17.0% | 18.8% | -8,502 | 82,745 | $1.85 |
| Emeryville | 5,376,263 | 0 | 14.6% | 16.2% | 16.8% | 12,231 | 23,277 | $4.50 |
| Oakland | 34,490,892 | 0 | 10.0% | 11.1% | 12.5% | -420,123 | 126,894 | $1.40 |
| Alameda | 6,741,801 | 0 | 12.0% | 12.4% | 14.1% | -228,670 | 0 | $1.23 |
| San Leandro/San Lorenzo | 24,580,361 | 0 | 7.8% | 10.5% | 11.8% | -128,607 | 214,261 | $1.60 |
| Hayward | 43,994,100 | 99,395 | 9.5% | 11.6% | 13.9% | 19,327 | 671,296 | $1.35 |
| Union City | 14,291,218 | 0 | 6.8% | 8.5% | 9.4% | -197,460 | 141,201 | $1.35 |
| Fremont/Newark | 58,920,840 | 413,024 | 5.9% | 7.3% | 8.5% | 233,520 | 929,008 | $1.70 |
| East Bay Totals | 214,746,444 | 512,419 | 8.7% | 10.2% | 11.6% | -731,249 | 2,346,032 | $1.59 |
East Bay Industrial Statistics by Building Type
| Building Type | Total Inventory (SF) |
SF Under Construction |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
2Q26 Direct Net Absorption (SF) |
2Q26 Leasing Activity (SF) |
Direct Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| General Industrial | 46,577,317 | 99,395 | 6.3% | 7.4% | 7.9% | -485,301 | 476,813 | $1.43 |
| Warehouse/Distribution | 124,874,201 | 413,024 | 7.9% | 9.7% | 10.9% | -421,480 | 1,322,635 | $1.35 |
| Flex | 43,294,926 | 0 | 13.5% | 14.9% | 16.4% | 175,532 | 546,584 | $2.25 |
East Bay Industrial Statistics by Building Size
| Building Size | Total Inventory (SF) |
SF Under Construction |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
2Q26 Direct Net Absorption (SF) |
2Q26 Leasing Activity (SF) |
Direct Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| 5,000-24,999 SF | 38,138,715 | 0 | 5.4% | 6.0% | 6.9% | 170,769 | 296,867 | $1.40 |
| 25,000-49,999 SF | 36,775,832 | 0 | 8.1% | 9.2% | 10.6% | 75,475 | 237,150 | $1.63 |
| 50,000-99,999 SF | 45,764,303 | 169,267 | 10.1% | 11.5% | 14.0% | -128,543 | 577,338 | $1.54 |
| 100,000-199,999 SF | 43,359,438 | 0 | 9.5% | 11.4% | 11.5% | -571,303 | 889,144 | $1.65 |
| 200,000+ SF | 50,708,156 | 343,152 | 9.6% | 12.1% | 12.6% | -277,647 | 345,533 | $1.57 |
Data as of 2Q 2026. Source: CoStar. Prepared by the Kidder Mathews Research Group.
Significant Sale Transactions 2Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| 49000 Milmont Dr | Fremont | 267,099 | $132,300,000 | $495.32 | Clarion Partners | Hines | Oaktree Capital Mgmt. |
| 4211 Starboard Dr | Fremont | 129,808 | $61,000,000 | $469.92 | WisLab EMS | LIPT Bixby III LLC |
| 38083 Cherry St | Newark | 155,500 | $28,600,000 | $183.92 | Hines | United Logistics Solutions |
Significant Lease Transactions 2Q 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| 7411 Central Ave | Newark | 143,000 | June 2026 | Pearlmark Real Estate | Quanta Manufacturing |
| 40545-40577 Albrae St | Fremont | 100,000 | June 2026 | Blackstone | Quanta Computer |
| 2801 Giant Rd | Richmond | 80,000 | April 2026 | North Richmond Properties | Halmar International |
Significant Development Projects
| Property | Submarket | Square Feet | Type | Delivery Date |
|---|---|---|---|---|
| Campus @ Bayside | Fremont | 258,472 | Manufacturing | 3Q 2026 |
| Diablo Park | Hayward | 99,395 | Data Center | 3Q 2026 |
| PowerPlant Park | Richmond | 78,354 | Warehouse | 3Q 2026 |
Data as of 2Q 2026. Source: CoStar. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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