The national demand for new industrial space, after showing gains late last year, is expected to be on the upside again for the duration of 2026, a new industry report is forecasting.
Noting that the net absorption rate came in just below the 129 million square feet in the latter half of 2025, the report – Industrial Space Demand Forecast – says that the demand could jump to 154.8 million square feet over the course of the first six months of this year.
Published by the NAIOP Research Foundation, the report additionally predicts that total industrial space absorption will be up to 345.9 million square feet by the end of this year.
The stronger numbers, says the report, is evidence that “occupiers have begun to adjust to earlier disruptions in investment activity and trade policy.”
Meanwhile, “greater clarity around interest rates and reduced concerns about tariff policy have helped improve the outlook for 2026.”
“Growth in e-commerce sales also supports demand for more modern logistics and fulfillment space,” continues the report, adding that “leasing by logistics, distribution, and third-party logistics firms has risen, while the supply of suitable space remains limited as many occupiers seek to replace aging assets.”
Looking beyond immediate trends, the report sees an absorption rate of 267.7 million square feet in 2027.
While the current and long-term numbers are strong, they are still dwarfed by trendlines in 2022, when the industry was still in the throes of the pandemic economy. At that time the total absorption rate stood at 630.7 million square feet.
NAIOP stands for the National Association of Industrial and Office Properties, a phrase that the group no longer uses, opting instead for the simple acronym.
March 12, 2026
By Garry Boulard
Photo courtesy of Unsplash
