Industrial Demand to Remain Level as Economy Steadies

Industrial Space Demand Q12019

Table 1 - The NAIOP Industrial Space Demand Forecast with 70% Condence Intervals, First Quarter 2019

The forecast for net industrial space demand will remain steady in 2019 at approximately 57 million square feet per quarter for 2019, says the new NAIOP Industrial Space Demand Forecast, First Quarter 2019.

Dr. Hany Guirguis of Manhattan College and Dr. Joshua Harris of New York University report that industrial demand will be off to a strong start in 2019 with a potential tapering off into 2020 as rising interest rates moderate the economy’s growth rate. At present, the risk of a downturn in the industrial space market appears slim as the nationwide vacancy rate sits at a historically low 7.0 percent. Further, gross and net asking rents are at all-time highs, indicating that the market supply continues to tighten at a steady rate.

“The U.S. industrial real estate markets appear to be healthy and stable, and the industrial asset class is potentially in the best position to weather any downturn that may come in the next several years, thanks to manufacturing’s growth and the continued surge in demand for e-commerce fulfillment facilities,” said Thomas J. Bisacquino, NAIOP president and CEO.

The authors’ findings include:

  • While data are somewhat suppressed due to the U.S. government shutdown that took place from December 22, 2018, until January 25, 2019, economic indicators point to moderate growth.
  • Overall U.S. economic activity will remain steady in 2019, with annualized rates of GDP growth in the mid-2 percent range. Steady growth is the biggest factor keeping the industrial demand forecast stable. The labor market and overall consumer confidence are also expected to grow for the year, with industrial space demand increasingly influenced by consumer spending.

Access the full report. Accompanying charts and graphics, as well as opportunities for interview, are available.

See information on actual vs. forecast and the methodology behind the report on the Industrial Space Demand website.


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About NAIOP: NAIOP, the Commercial Real Estate Development Association, is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate. NAIOP comprises 19,000 members in North America. NAIOP advances responsible commercial real estate development and advocates for effective public policy. For more information, visit

Kathryn Hamilton