BOSTON, MA -- The industrial real estate market posted a solid first quarter 2006, with absorption totaling 44.5 million square feet (msf) -- compared with 57.5 msf during the fourth quarter of 2005 and 45.3 msf during the year-ago quarter -- according to a report by Colliers International, the global real estate services firm.
Most demand drivers are still in place, with virtually every market across the country forecasting demand to remain at current levels or higher. However, steadily rising energy costs are a distinct cause for concern -- for the economy at large and in terms of fuel costs' impact on moving goods across the U.S. supply chain.
"A few of the larger markets posted disappointing results in the first quarter, but generally speaking, market momentum is unchanged from last year," remarked Ross Moore, senior vice president and director of market and economic research at Colliers International. "We are definitely concerned about rising fuel costs, particularly for those companies involved in distribution and transportation, but we do not expect this to materially affect the overall warehouse market at this particular time."
First quarter vacancies measured 8.5 percent, versus 8.6 percent during the fourth quarter of 2005 and 9.2 percent during the year-ago quarter. Warehouse rents dropped marginally during the first quarter, but are up 5.5 percent year-over-year.
Further underscoring Colliers' bullish stance is Monday's release of the Institute for Supply Management's manufacturing index, which jumped from 55.2 to 57.3. Any posting above 50 indicates expansion, and the warehouse markets are symbiotically linked to manufacturing; thus, the continuing health of the industrial market is clear.
New construction during the first quarter inched up to 40.2 msf, as compared to 40.0 during the fourth quarter of 2005 and 27.0 msf worth of completions during the year-ago quarter. In terms of development, warehouses under construction fell marginally during Q1 2006 108.5 msf versus 108.6 msf during the fourth quarter -- however, year-ago developments under construction totaled only 75.5 msf.
Metropolitan Warehouse Space Markets (ranked by March 31 ascending vacancy rate):
VACANCY RATE VACANCY RATE
MARKET DEC 31 2005(%) MAR 31 2006(%)
Los Angeles, CA 2.7 2.8
Riverside/San Bernardino - Inland Empire, CA 2.6 3.1
Bakersfield, CA 3.5 3.3
West Palm Beach, FL 3.2 3.4
Miami, FL 4.1 3.8
Orange County, CA 3.6 3.8
Las Vegas, NV 4.4 4.0
Ft. Lauderdale/Broward County, FL 4.4 4.3
Columbia, SC 5.1 4.7
St. Louis, MO 5.4 5.3
Tampa, FL 6.4 5.5
San Francisco Peninsula - San Mateo, CA 6.2 5.7
Charleston, SC 7.1 6.0
New Jersey - Northern 5.7 6.2
Reno, NV 7.0 6.2
Cincinnati, OH 5.8 6.3
Nashville, TN 6.7 6.5
New Jersey - Central 6.6 6.7
San Diego, CA 6.8 6.7
Oakland, CA 6.7 6.8
Houston, TX 7.4 6.9
Milwaukee, WI 7.2 7.4
Indianapolis, IN 6.8 7.4
Seattle, WA 7.3 7.5
Boise, ID 8.0 7.5
Orlando, FL 8.0 7.6
Jacksonville, FL 7.7 7.6
Fresno, CA 9.1 8.0
Phoenix, AZ 9.4 8.2
Pleasanton/Walnut Creek, CA 8.8 8.7
Cleveland, OH 9.1 8.9
Kansas City, MO 9.5 9.0
Louisville, KY 7.9 9.2
Denver, CO 9.2 9.2
Washington, DC 9.2 9.2
Chicago, IL 9.0 9.3
Philadelphia, PA 10.5 9.9
Dallas-Ft. Worth, TX 11.0 10.9
Portland, OR 10.5 10.9
Charlotte, NC 11.8 11.2
Sacramento, CA 12.1 11.5
Atlanta, GA 11.5 11.6
Little Rock, AR 14.0 11.7
Minneapolis, MN 13.0 12.3
Detroit, MI 12.2 13.0
Hartford, CT 13.2 13.2
San Jose/Silicon Valley, CA 14.5 13.6
Baltimore, MD 16.5 14.7
Memphis, TN 15.2 15.6
Austin, TX 16.5 16.0
Pittsburgh, PA 16.0 16.4
Raleigh, NC 21.6 19.5
Boston, MA 26.5 25.7
About Colliers
Colliers International is a global partnership of independently owned commercial real estate firms. The organization's 9,141 employees span the world in approximately 250 offices worldwide. On a global basis, Colliers manages over 660 million square feet, and has revenue of over US$1 billion. For more information about Colliers International, visit http://www.colliers.com/.
Source: Colliers International
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| Notes:
CONTACT: Kristin Sadlon of Porter Novelli for Colliers, +1-212-601-8192,
Kristin.sadlon@Porternovelli.com
Web site: http://www.colliers.com/
About This Release
If you have any questions regarding information in this press release, please contact the organization listed in the press release. Issuers of press releases and not TCI are solely responsible for the accuracy of the content.
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