Des Moines Industrial Space Vacancy Drops to 7.4 Percent
Business owners should expect tighter competition for available space as vacancy rates fall to 7.4 percent in Des Moines.
Updated on Oct. 28, 2026 in Commercial
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The Des Moines industrial market saw vacancy rates tighten to 7.4 percent during the third quarter of 2026. This trend was driven by significant leasing activity, including a 275,000 square foot lease at 5844 NE 19th St.
Why it matters
Local businesses are increasingly prioritizing functional, second-generation space to manage occupancy costs. This shift comes as rising construction and labor expenses create a more challenging development environment for new inventory.
CBRE reports there are currently 12 industrial buildings available for lease in Des Moines, with only five speculative spaces remaining vacant. Meanwhile, developers are actively working on 895,600 square feet of new construction to meet ongoing demand.
The players
CBRE
A global commercial real estate services firm that tracks local occupancy trends and provides market data analysis.
Franzenburg Centrifuge
An industrial entity that recently expanded its local footprint by purchasing two properties on SW 22nd St.
Next Phase Development
A real estate development firm responsible for the sale of industrial sites at 7700 and 7901 SW 22nd St.
Red Boot Beverages
A local beverage business that secured a significant 275,000 square foot lease at 5844 NE 19th St.
The details
Industrial occupancy improved throughout the third quarter as positive net absorption rates outpaced the delivery of new building projects. Market activity also included the sale of properties at 7700 and 7901 SW 22nd St. by Next Phase Development to Franzenburg Centrifuge. These transactions suggest that while building new industrial space is costly, firms are actively securing existing footprints to ensure operational continuity.
Timeline
Industrial market metrics were captured during Q3 2026.
The Home Front
The current industrial tightening aligns with broader regional trends where companies favor established space over new builds due to higher capital costs. This shift underscores a preference for functional inventory as the Des Moines market balances high demand against limited speculative availability.
Business owners looking to expand should note that competition for existing industrial space remains high as only five speculative sites are currently vacant. Reach out to a local commercial real estate agent to monitor lease rates and track new inventory arriving as the 895,600 square feet currently under construction reaches completion.
The takeaway
Tightening vacancy rates suggest that demand for existing industrial property in Des Moines continues to outpace new supply. Businesses should prioritize long-term lease planning and consult with a licensed broker to navigate the current low-inventory environment.
Further reading
For broader trends in the local market, visit Commercial.
Source note: This article includes information reported by Business Record.
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