Absorption Rate Definition

Market absorption refers to the pace at which industrial land or built-up space is sold or leased over a defined period. Assumptions are based on local demand, competition, and infrastructure readiness.

• Typically measured in acres or square feet absorbed per month or year
  
• Influenced by economic trends, industrial activity, and vacancy levels

Common Assumptions in Industrial Markets

Valuation models and feasibility studies often assume absorption rates based on comparable projects, current inventory, and expected demand.

• In active zones, absorption may be projected at 10% to 20% of available land annually
  
• For phased developments, initial phases may absorb faster (within 12 to 24 months), with later phases spread over 3 to 5 years
  
• Market reports or local broker insights help refine assumptions based on tenant behavior and sectoral demand