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Midwest Market Demands Gaining Attention
CBRE’s Q2 2026 industrial reports for Des Moines and Omaha show a market transitioning from rapid expansion into a more balanced phase, while still supported by strong long-term demand. Vacancy has increased slightly in both markets due to new deliveries and select tenant shifts, but demand for modern logistics space remains steady, especially in well-located, Class A developments. While each market tells a unique story, one theme is clear: demand for well-located industrial space remains healthy, and strategic developments are well-positioned to capitalize on the region’s economic expansion.
For Hubbell Realty Company, these trends reinforce what we’ve long recognized: the Midwest remains one of the nation’s most compelling regions for industrial investment and development, particularly in high-growth corridors such as Omaha’s Sarpy County and Greater Des Moines.
Omaha Continues to Outperform
Few industrial markets in the country can match Omaha’s combination of low vacancy, rising rents and sustained tenant demand.
According to CBRE, Omaha’s industrial vacancy rate fell to just 1.2% in Q2 2026, reaching its lowest level in the past three years. At the same time, average asking rents climbed to $8.02 per square foot, an increase of more than 11% year-over-year. Net absorption remained exceptionally strong at nearly 495,000 square feet, while more than 1.5 million square feet is currently under construction.
The epicenter of this activity is Sarpy West, where the submarket recorded more than 540,000 square feet of positive absorption during the quarter and now accounts for more than 1.2 million square feet of industrial development underway.
These numbers are especially meaningful for Hubbell Realty, whose Infinity Industrial Park continues to establish itself as one of the region’s premier industrial destinations.
CBRE specifically highlighted Infinity Industrial Park Buildings 3 and 4 among the largest projects currently under construction in the Omaha metro, each totaling approximately 297,500 square feet.
The success of Infinity Industrial Park is already reflected by a growing roster of tenants. National and regional businesses continue to choose the development because of its strategic location, modern facilities and access to major transportation networks. Companies such as Ford Storage and Rotella’s Italian Bakery, along with other expanding employers, represent the type of industrial users fueling Omaha’s growth story.
Notably, CBRE identified Ford Storage’s 298,000-square-foot lease in Sarpy West as one of the largest industrial transactions completed during the quarter.
Des Moines Shows Signs of Rebalancing
While Omaha remains exceptionally tight, the Des Moines market is transitioning into a more balanced phase following several years of rapid industrial growth.
CBRE reported nearly 982,000 square feet of positive net absorption in Q2 2026, helping reduce vacancy from 8.6% to 7.5% quarter-over-quarter. Availability also declined, while almost 937,000 square feet remains under construction across 14 active projects.
Several major occupancies drove demand during the quarter, including:
- Logistics Plus occupying 357,000 square feet in Des Moines
- PepsiCo taking occupancy of a newly constructed 215,344-square-foot facility in Grimes
- Triple J Environmental purchasing a 159,705-square-foot property in Des Moines
Although vacancy remains above the historically low levels experienced in 2023, the market’s strong absorption suggests existing inventory is being steadily absorbed by users seeking modern industrial space.
For developers and investors, this creates opportunities to pursue projects that align with evolving tenant demands while maintaining a disciplined approach to new supply. Central Iowa’s industrial strength has been built through decades of strategic investment in logistics and distribution infrastructure, and Hubbell Realty has played an important role in that evolution. As companies increasingly sought access to major transportation corridors and modern industrial space, Hubbell helped meet that demand through developments such as Grimes Distribution Center, Crosswinds Business Park, and Four Mile Distribution Center.
These projects reflect many of the same market drivers CBRE continues to identify today: strong tenant demand, proximity to key transportation networks, and a growing need for efficient distribution and warehouse space throughout the region.
Industrial Demand Remains Driven by Logistics and Distribution
Across both markets, distribution and logistics users continue to be the dominant force behind leasing activity.
“When we can tell our clients that we can reach 92% of the United States within a two-days drive of our location at Infinity, that changes the trajectory of our business and the services we can provide,” said Ford Storage.
In Des Moines, the distribution/logistics segment generated nearly 1 million square feet of quarterly absorption and represents the largest share of active development.
Similarly, Omaha’s distribution/logistics inventory posted more than 526,000 square feet of absorption, with over 1.36 million square feet currently under construction. Nebraska recently scored 9th out of the 50 states in Labor, Energy and Taxes as well, making the draw that much more strong.
These trends reflect broader changes in supply chains, e-commerce growth and businesses’ desire to position operations near central U.S. transportation corridors. Iowa and Nebraska continue to benefit from their geographic advantages, access to interstate networks and business-friendly environments.
Why This Matters for Investors
The latest CBRE data highlights several encouraging indicators for industrial investors:
1. Strong Occupier Demand
Positive absorption in both markets demonstrates that businesses continue to expand and lease industrial space. Combined quarterly absorption exceeded 1.47 million square feet across Omaha and Des Moines.
2. Healthy Development Pipelines
Construction activity remains robust but measured relative to demand. Omaha currently has approximately 1.54 million square feet under construction, while Des Moines has approximately 937,000 square feet underway.
3. Rental Rate Growth
Omaha’s double-digit annual rent growth highlights the value of high-quality industrial assets in supply-constrained markets. Des Moines rents remain stable as the market absorbs newer inventory.
4. Strategic Midwest Positioning
The central location of Iowa and Nebraska allows companies to efficiently reach customers nationwide, supporting long-term industrial demand and investment performance.
Hubbell’s Long-Term Vision
As industrial demand continues to expand throughout the Midwest, Hubbell Realty remains focused on identifying opportunities that create value for tenants, communities and investors alike.
The continued success of Infinity Industrial Park demonstrates how thoughtful development, strategic location selection and strong partnerships can attract leading regional and national employers. As CBRE’s latest reports show, Omaha continues to emerge as one of the Midwest’s strongest industrial markets, while Des Moines remains a critical distribution and logistics hub positioned for future growth.
For businesses seeking modern industrial solutions and investors looking to participate in the region’s growth, the fundamentals remain compelling—and Hubbell is proud to be helping shape that future.
Sources: CBRE Research, Des Moines Industrial Figures Q2 2026 and Omaha Industrial Figures Q2 2026.
