We might be seeing improving signs for industrial real estate today.
The United States’ overall vacancy rate, a key indicator of real estate performance, has declined to a two-year low of 9.7 percent at the midpoint of 2011, down from 10.6 percent the same time a year ago, according to Cushman & Wakefield .
The vacancy rate’s decline from the first quarter this year represents the biggest quarterly drop since the first three months of 1997, according to Cushman & Wakefield. Also, industrial leasing activity totaled 144.8 million square feet at this year’s midpoint, a 14 percent increase from the first half of 2010. That increase was seen across a number of hubs – Chicago, New Jersey, Dallas, Houston and even Atlanta.
Markets with the largest increases included Inland Empire, Calif. (up 4.5 million square feet), Dallas/Fort Worth (up 3.5 million square feet) and central New Jersey (up 3.0 million square feet). While build-to-suit developments and consolidations have been the story here in Atlanta, other parts of the United States are seeing interest in more speculative projects.
“This is especially true in Southern California, which is the largest industrial market in the world,” according to the Cushman & Wakefield report released by Jim Dieter, the firm’s executive vice president of U.S. industrial brokerage.
Also, rental rates are rising, investors and developers are looking to acquire properties and land. “This bodes well for other markets, which we expect will follow in Southern California’s footsteps in the near term,” according to Cushman & Wakefield. (credit d, sams)