Industrial Market Regains Strength in Second Quarter
The industrial market rebounded during the second quarter of 2007, pushing the vacancy rate down 10 points to 7.6 percent, according to a report by Grubb & Ellis.
The industrial market rebounded during the second quarter of 2007, pushing the vacancy rate down 10 points to 7.6 percent, according to a report by
Grubb & Ellis.
Net absorption totaling 44.9 million square feet bested space completions of 31.0 million square feet by a wide margin, pushing the vacancy rate down, indicating that lenders and developers are adding new supply at a disciplined pace, according to the report.
Among major U.S. markets, second quarter vacancy was lowest in Los Angeles at 1.8 percent and highest in Raleigh-Durham at 15.7 percent. Vacancy dropped most sharply over the past four quarters in San Antonio, down 380 basis points, followed by Austin, Denver and Albuquerque.
Vacancy rose by 190 basis points in Las Vegas, while six other markets saw vacancy rise by more than 100 basis points, including Grand Rapids, Mich., Palm Beach, Fla., Philadelphia and Seattle.
The 44.9 million square feet absorbed in the first quarter vaults demand back to the rarified levels of 2005 and 2006, reversing the dip in the first quarter of 2007.
The average asking rental rate for warehouse/distribution space remains flat considering that the market is moving through a vigorous expansion cycle. The average asking rate for warehouse/distribution space available at mid-year was $4.47 per square foot per year, triple net, down 6 cents over the prior four quarters.
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