Industrial Real Estate Faces Short-Term Decline in NAIOP Report

By Scott Baltic

Given the U.S. economy’s deterioration and the likelihood that the recession will continue through the end of this year, industrial space absorption will decline sharply in the third quarter, according to a report from NAIOP.

NAIOP’s Third Quarter Industrial Space Demand Forecast anticipates this backsliding, despite industrial real estate having outperformed other commercial property types up until now due to the surge in e-commerce. The report expects industrial net absorption to decline to negative 141 million square feet in the third quarter. “Net absorption is forecast to remain negative after Q3, with negative absorption of approximately 72 million square feet in Q4 2020 and 27 million square feet in Q1 2021,” the report states.

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