ProLogis, the Denver-based leading global provider of distribution facilities, recently released mid-year 2006 results on 30 major distribution and warehouse markets. The company - which owns, manages, and develops property in North America, Europe, and Asia - predicts that the ongoing 3-year recovery of the industrial market and the overall vacancy rate may soon level off. The report, titled “U.S. Property Market Review: 30 Major Distribution & Warehouse Markets” can be downloaded online at the National Association of Industrial & Office Properties (NAIOP) website.
Leonard Sahling, first vice president, ProLogis Research Group, and author of the market report, notes that signs are pointing to a transition into a “seller's” market. The following highlights were excerpted from the report:
- The overall vacancy rate for the nation’s top 30 distribution markets edged down to 8 percent in second quarter of 2006 from 8.1 percent in the fourth quarter of 2005 and 8.8 percent in the second quarter of 2005.
- Net absorption amounted to 67 million square feet during the first half of 2006 - off slightly from last year’s breakneck pace but still equal to a healthy 2.8 percent annual rate of growth in total occupied space (or realized demand).
- Asking rents continue to climb, attesting to the taut conditions prevailing in the nation’s warehouse/distribution leasing markets. For the year ending in second-quarter 2006, asking rents nationwide have increased 8 percent on average.
- New construction is continuing to ratchet up, just as it normally does as the cyclical recovery matures. On balance, new construction remains disciplined, and there’s still no sign of systematic overbuilding.
To read the complete report, visit (www.naiop.org/industrylinks/network/prologisreview.pdf).