By Shawn Moura, Ph.D.
NAIOP’s most recent Industrial Space Demand Forecast (“Forecast”), released in August, projected a sharp decline in net absorption for the third quarter, to negative 141 million square feet. According to data provided by CBRE, the actual industrial net absorption in the third quarter was substantially higher at 67.7 million square feet. Past iterations of the Forecast have been largely accurate, so why the miss? Part of the answer lies in how consumers shifted their behavior in response to the pandemic.
This entry draws from discussions with Timothy Savage, Ph.D., and Hany Guirguis, Ph.D., the authors of the Forecast, and NAIOP Research Foundation Governors Douglas Swain and Lewis Agnew, to examine why the third-quarter forecast underestimated demand. As industrial developers, Swain and Agnew were able to offer an on-the-ground perspective on the leasing market, providing additional insight into the trends that are currently shaping demand for industrial space.