The national industrial property sector absorbed 28.6 million square feet of space during the fourth quarter of 2010, propelling what had been a net loss for the year into a solid gain, according to Colliers International's Q4 2010 North America Industrial Highlights report.
Colliers says the robust fourth-quarter activity likely signals the beginning of the next up cycle for the industrial sector as demand for warehouse space – fueled by an increase in import and export activity and an improving appetite for consumer goods – is expected to rise.
While the industrial property sector took a significant turn that will likely accelerate through the end of this year, a handful of markets saw a substantial jump in occupied space (relative to their size) and contributed nearly 70% of total occupancy gains. Those markets include Charleston, S.C.; Cincinnati; Dallas-Ft. Worth; California's Inland Empire; Little Rock, Ark; New Jersey; Philadelphia; Phoenix; and Savannah, Ga..
Until this level of recovery broadens into additional markets, expectations for dramatic improvement in the overall market should be tempered, Colliers explains. Despite gains in net absorption, average asking rents for industrial space on a national basis declined slightly, to $4.60 per square foot.
The good news, the firm adds, is that rising demand for space, coupled with minimal new construction and an overall vacancy rate that dropped to 10.74%, positions the national industrial sector for a strong 2011.
Colliers International projects that 50 million square feet of quarterly absorption is ‘well within reach’ for 2011.
‘The national industrial market has made a significant rebound and is positioned to meet, and possibly exceed, growth expectations in 2011,’ says Dylan Taylor, CEO for Colliers International in the U.S. ‘The fundamentals continue to improve, and barring any unforeseen events, we are confident that the industrial sector will have an extremely positive year.’
SOURCE: Colliers International
