Report shows I-78/I-81 corridor leads region in industrial real estate demand

A new report from Cushman & Wakefield shows that industrial demand across New York, New Jersey and Pennsylvania accelerated dramatically during the first half of 2026, with the I-78/I-81 corridor leading the way. 

According to the report, across the three states, new leasing activity increased 35.6% year over year to 36.5 million square feet, the second-highest first-half total since 2021. The increase in demand helped push the regional vacancy rate down 10 basis points year over year to 8.5%, while the corridor recorded 16.1 million square feet of positive net absorption through June.   

“After several years when new supply was reshaping market fundamentals, we’re now seeing demand accelerate enough to begin changing that equation,” said Dimitri Mastrogiannis, senior research Analyst at Cushman & Wakefield. “The important signal at midyear isn’t simply that leasing increased. It’s that stronger demand is translating into occupancy gains across nearly the entire corridor, even as individual markets remain at very different points in their recovery.” 

The report described Pennsylvania as the region’s economic engine driver. 

The PA I-81/I-78 Corridor recorded 11.1 million square feet of new leasing during the first half of the year, already exceeding 80% of its full-year 2025 total according to the report.  

The market also generated 7.5 million square feet of net absorption, the highest among the markets included in the report. At the same time, Pennsylvania remains a key test of the region’s ability to absorb additional supply.  

The PA I81/I-78 Corridor accounts for 14.1 million square feet, or 45.5%, of the 31.1 million square feet currently under construction across the TriState region.  

“Pennsylvania is demonstrating just how quickly the demand picture can change when occupiers return to the market at scale,” said Ryan Hull, senior research analyst at Cushman & Wakefield. “The I-81/I-78 Corridor is absorbing significant space while maintaining a substantial development pipeline. The second half will tell us a lot about how effectively that demand can keep pace as additional supply comes online.”  

So, while Pennsylvania is absorbing industrial space at a rapid pace, the report shows the market still has a substantial development pipeline to work through as demand continues to recover.