North American Industrial Highlights 4Q 2009
U.S. industrial real estate markets finished the year on a weak note, but were a marked improvement compared with the prior three quarters. The backdrop for warehouse markets was still fairly dismal with most warehouse users looking to consolidate their space needs or hold their real estate needs steady at best, but the tone was more upbeat than earlier in the year. Rents however, fell again and continued an eight quarter long series of declines. Even though the economy registered robust growth in the fourth quarter and further expansion is expected in the coming quarters, U.S. warehouse markets are unlikely to stage any vigorous bounce back anytime soon.
For 2010 a further increase in vacancy is anticipated, although at a much reduced rate, with vacancies plateauing as early as Q2. With almost no construction coming onto the market and forecasts for continued economic growth over the next few quarters, occupancies should begin to rise by midyear and firmer fundamentals by year end. Rental growth, however, will not be part of the real estate lexicon during 2010 and many markets may have to wait until 2012 before rents start to rise.
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