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NAIOP Sees Uptick in Industrial Demand

The potential for a slowdown in net absorption due to a stall in macroeconomic activity is now pushed back to 2019 at the earliest, says the NAIOP Research Foundation.

By Paul Bubny | paulbubny | Updated on August 24, 2017

NAIOP headquarters building NAIOP headquarters in Herndon, VA; the association says the latter half of 2017 may see “a release of pent-up demand.” (Photo courtesy of Metro Offices)

HERNDON, VA—After demand for industrial space came in well short of expectations in the year’s first half, NAIOP expects absorption to get back on track in the second half. A new report from the NAIOP Research Foundation predicts an average of 66 million square feet of absorption for both the third and fourth quarters and an average of 60 million square feet per quarter in 2018. That compares to the 123 million square feet of absorption that was forecast for the first six months of 2017 and the 92 million square feet that was actually absorbed.

A major chunk of the shortfall between expectations and reality occurred in Q1, when absorption fell shy of estimates by more than 20 million square feet. The quarter saw space demand of 34 million square feet, well short of the 58 million square feet that was forecast.

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