Driven by sustained growth in e-commerce, demand for industrial real estate continues to outpace supply, leading to increases in net absorption for the rest of the year and through 2022, according to NAIOP’s recently released Industrial Space Demand Forecast.

The authors of the report, Hany Guirguis and Michael Seiler, forecast that total net absorption in the second half of 2021 will be 162.6 million square feet with a quarterly average of 81.3 million square feet. In 2022, they projected net absorption of 334.6 million square feet with a quarterly average of 83.6 million square feet. High absorption rates are contributing to favorable conditions for industrial building owners and developers. Despite an increasing supply of industrial space, vacancy rates remain low, leases are being signed at higher rates and industrial transaction prices per square foot are increasing.

“Even though the increases in COVID-19 cases that we are now seeing threaten once again to disrupt a stable overall economic rebound, industrial real estate has been and remains a bright spot in the commercial real estate industry,” said Thomas Bisacquino, president and CEO at NAIOP. “Lower unemployment rates, and increased consumer demand should continue through the end of year, sustaining the growing need for warehouse and distribution facilities.”