Industrial Market Remains Strong
Colliers International reported the industrial real estate market was marked by steady demand during the 4th quarter although rents and construction did not increase as much as anticipated. Fourth quarter absorption was back above the 50.0 msf (million square feet) threshold with occupied space increasing by 50.9 msf, compared with 48.4 msf during 3rd Quarter and 57.5 msf during the year-ago quarter. Full-year absorption totaled 188.6 msf in 2006, as compared with 2005, when occupied space increased by 222.8 msf.
Fourth quarter industrial vacancies measured 8.19 percent, versus 8.21 percent during 3rd Quarter and 8.55 percent during the year-ago quarter. Warehouse rents increased by just 0.4 percent in Q4, after rising 3.6 percent during the third quarter. Rents were up 7.0 percent year-over-year, compared with 2005, when they increased by 4.6 percent.
Just a handful of markets are forecasting demand to drop during the 1st Quarter of 2007, with the vast majority anticipating leasing markets to remain robust.