Warehouse Demand Resilient
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I’m going to write about something positive. True, the DOW is down about 300 as this is written and the CMBS market is running into rough waters so the overall situation out there is not exactly positive.
In spite of so much gone wrong, the industrial real estate market is clipping along just fine by posting strong leasing activity, declining vacancies and positive net absorption.
The American industrial vacancy rate fell to 9.8% from 10.4% a year ago, and most other indicators improved substantially in the 2nd quarter. The warehouse market has experienced five quarters of positive growth totaling 103,000,000 sq ft.
Anyone of you who watches/reads the news is well aware of the headwinds we’re facing with extremely disappointing job growth, tepid GDP growth nowhere near enough to fuel job growth, poor consumer confidence, etc.
“CoStar analysts expect that growth, combined with tightening warehouse supply, to result in a quickening of warehouse absorption over the next few years, topping 40 million square feet per quarter through the end of 2014 as vacancy falls to below 7%. Even under a slow growth scenario, the national vacancy rate would fall to a healthy level of just over 8% within three years due to historically low levels of construction.” I’m not sure I buy this right now, but Randyl Drummer with CoStar news thinks differently. I very much hope he’s correct.
CoStar News – Article US Warehouse Demand Resilient In Face of Slowing Economy
