Our Backyard
Boise does not usually lead a real estate newsletter, which is rather the point. In the third quarter, Boise industrial recorded a record 1.5 million square feet of net absorption and its vacancy rate fell 100 basis points to 8.4%, according to Cushman and Wakefield. Asking rent reached $0.93 per square foot on a triple net basis, up 4.5% from a year earlier. Cushman's own series puts vacancy a full point higher just one quarter before, so this is a fast move. A year ago the standing worry across the interior West was oversupply, and Boise was the market everyone named. One quarter of record demand does not erase a construction pipeline, but it changes the story from digestion to absorption.
The same turn showed up across our markets at once. In Las Vegas, CBRE put industrial vacancy at 8.7% in the third quarter, down 20 basis points on the quarter and 170 basis points below the 10.4% cycle high recorded a year earlier, on roughly 1.5 million square feet of net absorption, one of the strongest quarters since 2023. Deliveries ran about 1.1 million square feet, below the elevated 2024 pace, so demand is finally running ahead of new supply instead of chasing it. Phoenix told the same story at larger scale: 1.59 million square feet absorbed, vacancy at 9.7% and down 150 basis points over the year, and asking rents up 9.0% from the third quarter of 2025, per CBRE.
Salt Lake City is the exception that frames the rest. Its vacancy is the lowest of the four at 7.3%, but net absorption was only 168,000 square feet, well off the prior quarter's pace, and CBRE describes the market as normalizing. That is not weakness. It is a market that cleared its supply earlier and now leases at a steadier, unremarkable rate, which is roughly where the other three are headed.
A year ago we wrote that the Southwest and Mountain West were splitting into industrial leaders and laggards. In the third quarter that gap closed: four markets, four different starting points, all now on the demand side of the cycle within a quarter of each other. For an owner, that thins out the leverage a tenant brings to a renewal, and the free rent that defined 2024 lease-up is getting harder to find. For a developer, the window to break ground into a lean pipeline is open, though it is the kind of window that closes about the time everyone notices it.
Asset Classes
The asset class with the cleanest math in American real estate right now is one most of our investors do not own: senior housing. In the third quarter, average occupancy across the 31 primary markets tracked by NIC MAP reached 90.4%, up 60 basis points from 89.8% in the second quarter, according to NIC data reported by Senior Housing News. NIC says the sector is on track to reach record occupancy (the highest it has ever recorded is 95.6%). Independent living hit 91.7% and assisted living 89.1%, and 16 of the 31 primary markets now sit at or above 90%, up from 15.
The demand side is demographic and not in dispute: the leading edge of the baby boom is now in its late seventies and eighties, the age at which people actually move into these buildings. The supply side is where it gets interesting. There were 16,159 units in development in the third quarter, and inventory grew just 0.4% over the year, near record lows. NIC estimates the current pace produces about 10,445 units a year, while meeting demand through the 2030s would take more than 100,000 a year. That is not a rounding error. It is close to a ten to one gap between what gets built and what the demographics call for.
The reason the gap persists is the reason it rewards a developer. Senior housing is operationally heavy, it repriced hard when financing costs rose, and new construction has been close to a standstill while demand compounds. The binding constraint is capital and the willingness to build, not tenants. That lands close to home: Arizona and Nevada have long drawn retirees, and the older cohort in both states keeps growing. We do not operate senior housing today. We are watching a sector where demand is close to certain, supply is stalled, and the people who can underwrite development and operations together are scarce. That is usually the setup that pays.
Sources
- CBRE, Las Vegas Industrial Figures Q3 2026
- CBRE, Phoenix Industrial Figures Q3 2026
- CBRE, Salt Lake City Industrial Figures Q3 2026
- Cushman and Wakefield, Boise Industrial MarketBeat Q3 2026
- Senior Housing News, reporting on NIC MAP Q3 2026 data
- National Investment Center for Seniors Housing and Care (NIC), Q1 2026 occupancy release
Frequently Asked Questions
- Is the Mountain West industrial oversupply over?
- Largely, on the demand side. In Q3 2026 Boise, Las Vegas, and Phoenix each absorbed around 1.5 million SF or more and vacancies fell from their cycle highs, with new deliveries now running below demand in several markets. Salt Lake City leased more slowly but already sits at 7.3% vacancy.
- Why does Boise matter to a Southwest investor?
- Boise was the market most cited for oversupply a year ago. Its Q3 2026 record absorption and 100 bps vacancy drop show the interior West correction clearing, which shortens the concession window tenants had been negotiating against across the region.
- Why is senior housing's supply and demand so lopsided?
- Demand is demographic and compounding as the boomer cohort ages into these buildings, but construction has nearly stopped. Inventory grew 0.4% in the year to Q3 2026, and the build pace is roughly a tenth of what meeting demand would require, per NIC.
- Does VAC invest in senior housing?
- Not today. We flag it because it has one of the cleanest supply and demand setups in US CRE right now: close to certain demand, stalled supply, and a shortage of groups able to underwrite both development and operations.