February 22, 2021

The NAIOP Research Foundation has published the NAIOP Industrial Space Demand Forecast for Q1 2021.

Key Takeaways

• The pandemic has accelerated ecommerce adoption and industrial space absorption.
• Federal stimulus programs have also contributed to an increase in industrial space absorption, with the fourth quarter of 2020 experiencing the largest quarterly net absorption since 2000.
• Total net absorption in 2021 is forecast to be 314.9 million square feet. In 2022, total net absorption is projected to be 231.6 million square feet.

Industrial real estate remains the leading property type as the pandemic accelerated an existing long-term trend toward increased e-commerce. As last-mile delivery is key for consumers, the distribution infrastructure will need to add more space. Delivery times slowed considerably during the pandemic, due in part to supply chain issues, and consumers now want deliveries made faster than ever. That means larger inventories and increased occupier demand. More cold storage and large distribution centers are also expected moving forward.