Is competition for industrial space set to rise?
September 17, 2010 | Dan Rafter | Print Article | Email this Article
Tenants have it pretty nice in today’s commercial real estate market. Building owners are lowering rents and providing concessions just to get them to rent space in their half-empty properties.
A new report from CB Richard Ellis, though, hints that this might slowly begin to change in late 2010, at least for the industrial sector.
According to CB Richard Ellis, the U.S. industrial real estate sector’s national availability rate should peak at 14.2 percent by the end of September before falling to 14 percent in the fourth quarter of 2010. Analysts with the company predict a slow descent into the first half of next year, with a forecasted availability rate of 13.4 percent by the third quarter of 2011.
As Luciana Suran, an economist with CB Richard Ellis, said that this would be a welcome development for the industrial market. As availability falls, building owners can slowly boost their asking rents.
Suran said that the demand for large distribution-related facilities greater than 400,000 square feet has steadily grown during the past few quarters. She pointed to Indianapolis where the availability for such buildings is down more than 200 basis points from its peak. Building owners in Indianapolis have seen asking rents begin to grow.
Tags | CB Richard Ellis, Indianapolis, industrial
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