By Grubb & Ellis Research:
• The market turned around in a big way in the second quarter as measured by vacancy and absorption while construction activity and rental rates continued to move lower – all signs of a nascent recovery.
• Vacancy fell by a decisive 30 basis points to 10.6 percent, ending a string of 10 consecutive quarterly increases. While the softening cycle appears to be over, the market remains awash in space with vacancy still 50 basis points above its year-ago level and 300 basis points above its cyclical low of 7.6 percent notched in the second and third quarters of 2007.
• Net absorption lunged ahead to 19.2 million square feet, breaking a string of six consecutive quarters in the red. This was the strongest performance since the first quarter of 2008 but still less than half the quarterly totals during the vigorous expansion of 2005 and 2006.
• Just 4.5 million square feet of new space was delivered in the second quarter, of which 74 percent was build-to-suit. Projects still in the construction pipeline at the end of the quarter totaled 11.1 million square feet, 61 percent of which was build-to-suit.
• The average asking rental rate for all types of industrial space offered on the market at the end of the second quarter was $5.35 per square foot per year triple net, a decline of 0.8 percent from the first quarter and 4.6 percent from the year-ago quarter. Rates for available space ended the quarter at $5.16 for general industrial (primarily manufacturing), $4.29 for warehouse-distribution and $9.34 for R&D/flex.
• The market turned around in a big way in the second quarter as measured by vacancy and absorption while construction activity and rental rates continued to move lower – all signs of a nascent recovery.
• Vacancy fell by a decisive 30 basis points to 10.6 percent, ending a string of 10 consecutive quarterly increases. While the softening cycle appears to be over, the market remains awash in space with vacancy still 50 basis points above its year-ago level and 300 basis points above its cyclical low of 7.6 percent notched in the second and third quarters of 2007.
• Net absorption lunged ahead to 19.2 million square feet, breaking a string of six consecutive quarters in the red. This was the strongest performance since the first quarter of 2008 but still less than half the quarterly totals during the vigorous expansion of 2005 and 2006.
• Just 4.5 million square feet of new space was delivered in the second quarter, of which 74 percent was build-to-suit. Projects still in the construction pipeline at the end of the quarter totaled 11.1 million square feet, 61 percent of which was build-to-suit.
• The average asking rental rate for all types of industrial space offered on the market at the end of the second quarter was $5.35 per square foot per year triple net, a decline of 0.8 percent from the first quarter and 4.6 percent from the year-ago quarter. Rates for available space ended the quarter at $5.16 for general industrial (primarily manufacturing), $4.29 for warehouse-distribution and $9.34 for R&D/flex.