Industrial Absorption to Stay Positive, but for How Long?

Amid the current slowdown, occupiers are adjusting their operational strategies, resulting in a measured deceleration of industrial absorption at a national level.

However, this cautious moderation won’t drag absorption in the red, though admittedly it’s not slated to be far off. Absorption is on track to reach 2.8 million square feet nationally during the second half of 2025, according to the latest NAIOP Industrial Space Demand Forecast, albeit the last quarter is set to compensate for the sluggishness of summer and early fall.

The NAIOP forecast model bakes in variables such as lagged net absorption, real GDP growth, inflation and output gaps, monetary policy, as well as seasonal and structural effects.

The constant back-and-forth in trade policies made it difficult for importers and exporters of raw, intermediate and finished goods to settle on any long-term leasing decisions, the report states. Such tenants will need to adapt to the new environment when accounting for their current and future occupancy..