San Jose industrial leasing regains momentum despite rising vacancy

Industrial leasing activity in San Jose is showing renewed momentum in early 2026, even as the market contends with elevated vacancy and a heavy construction pipeline. According to CoStar data, tenants are reentering the market, targeting modern logistics and power-intensive properties while remaining cautious on older flex and commodity space. This dynamic reflects a market in transition: Demand is improving but isn't strong enough yet to fully absorb recent and incoming supply.