Q3 Property Data and Schneider’s Quarter Point Toward Where Commercial Energy Retrofits Are Likely to Concentrate

JLL put US industrial vacancy at 6.8 percent in the third quarter, down 80 basis points year over year. Inside that figure, Class A warehouses above one million square feet fell to 5.4 percent vacancy from 9.5 percent a year earlier. Older and smaller buildings lost occupancy over the same period.

Colliers tracked the same direction with a different number, putting overall industrial vacancy at 7.2 percent with declines in 34 of the 79 markets it follows. Year-to-date net absorption reached 231.6 million square feet, surpassing the full-year 2025 total.

Rents moved with occupancy. JLL recorded national asking rents up 3.2 percent year over year to $10.55 per square foot. Colliers put average big-box rents at $8.87, up 3.9 percent.

The demand side. Schneider Electric’s chief financial officer, Nathan Fast, told analysts that the company’s energy management business saw strong demand led by non-residential facilities, singling out US public access and public administration buildings. Fast described higher interest rates as a condition that can boost retrofit work, because new construction churn slows when financing costs rise. He confirmed two price increases on the business in 2026, with the possibility of more.

What the two datasets say together. Building energy equipment gets installed when a building has an open capital project and an owner with a reason to finish it. The Q3 property data describes where those projects now sit.

Occupancy and rent growth concentrated in large, modern industrial assets. The stock losing tenants was older and smaller. A warehouse signing leases at 3.9 percent higher rents has the cash flow and the hold horizon that a ten- to fifteen-year equipment decision requires. The building shedding occupancy has the opposite capital position at the moment its owner would need to commit.

Schneider’s commentary cuts the other way on timing. Slower new construction pushes a larger share of building energy work into existing assets, where the electrical room is already open and the yard space is already committed. Those two forces land on the same square footage: occupied, modern, re-leasing buildings in markets where rents are rising.

Both brokerage reports stop at square footage, rent and occupancy, which leaves the electrical profile of the absorbed space as an open question. JLL noted that equipment suppliers and power infrastructure companies are establishing distribution hubs near hyperscale facilities, concentrated in Dallas-Fort Worth and the Washington, DC metro. That tenant type runs a heavier and spikier electrical profile than the dry storage it displaces, though neither report quantifies the load.

Office stock. Hubble attributes part of the improvement in office fundamentals to supply leaving the market, with owners shedding weaker assets while flex operators continue to add space.

Coworking absorbed some of what remains. National inventory grew by 2 million square feet in the quarter to 168.4 million square feet across 9,612 locations, lifting coworking to 2.5 percent of US office stock from 2.3 percent in June. Most new locations opened on the West Coast, with a meaningful share landing outside flagship metros.

Coworking Cafe reports that the largest market swings come from large management agreements and landlord-led in-house flex brands rather than from independent operators adding single sites.

Flex operators hold the electric account across that footprint, which puts the energy decision for many buildings with a single operator rather than with each individual landlord. A landlord running an in-house flex brand makes that decision across a portfolio.

Where storage-inclusive money is going. Schneider announced a $500 million partnership with energy-as-a-service firm Budderfly under the Modernizing American Cities program, aimed at municipal buildings. The scope explicitly lists battery storage alongside solar, EV charging, HVAC and lighting.

That is the one program in this set of disclosures with battery storage written into its scope, and it points at public buildings. The private stock that Q3 occupancy data describes gets its energy work through ordinary base-building and tenant-improvement capital, where storage competes line by line against HVAC and lighting measures with shorter payback and simpler permitting.

The industry models its addressable market from tariffs, incentives and code. The Q3 property data adds a filter that sits upstream of all three: the building has to still be in the stock, still have a tenant, and still have an owner planning to hold it. By that filter, the US commercial building market is sorting faster than the storage market is tracking.

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