Industrial Market Contracts Sharply During Q2
Ross J. Moore, Executive Vice President, Market and Economic Research
The U.S. industrial real estate market again posted an exceptionally weak quarter. Demand for industrial space was well below trend and warehouse construction continued to drop, but not quickly enough, as vacancies rose in most markets. Rents continued to fall with almost no region spared. With the economy only beginning to show tentative signs of stabilizing, warehouse mar-kets are unlikely to bounce back anytime soon. The Institute for Supply Management (ISM) manufacturing index in particular showed a marked improvement with a June reading of 44.2, the sixth consecutive monthly improvement; however, this was still below the critical “50” level. For the rest of 2009, increasing vacancies and weak leasing conditions are expected to continue in almost all regions of the country.
Warehouse tenants return space to the market at a record pace in the second quarter. Second quarter absorption was again strongly negative with occupied space decreas-ing by 57.5 million square feet (MSF). Second quarter results were the worst Colliers has ever recorded and considerably worse than the year-ago period when absorption registered –9.8 MSF. This brings year-to-date absorption to –99.7 MSF and leaves occupied space 121.6 MSF below peak levels recorded at the end of Q1 2008. Canadian markets also returned space to the market, with occupied space declining by 1.5 MSF.
Warehouse construction less than a third of 18 months ago. Second quarter comple-tions totaled just 16.7 MSF, a sizable drop from the second quarter when completions were 32.0 MSF, but less than a third of Q4 2007 levels when warehouse construction totaled 55.5 MSF. Next quarter’s construction numbers are anticipated to go even lower and stay below 20 MSF for the balance of the year and into 2010. Scarce construction financing and increased vacancies have almost halted speculative warehouse development across the country. This was reflected in construction activity, which registered just 35.0 MSF at the end of Q2, a substantial drop from
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HighlightsCO L L I E R S I N T E R N A T I O N A L | N O R T H A M E R I C A
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MARKET INDICATORS
USA INDUSTRIAL MARKET Q2 2008 – Q2 2009
USA INDUSTRIAL MARKET SUMMARY STATISTICSSECOND QUARTER 2009
Vacancy Rate Q2 2009: 10.16%
Change from Q1 2009: 0.63
Absorption Q2 2009:
–57.5 Million Square Feet
New Construction Q2 2009:
16.7 Million Square Feet
Under Construction:
35.0 Million Square Feet
Asking Rents Per Square Foot:
Average Warehouse/
Distribution Center: $5.09
Change from Q1 2009: –3.47%
continued on page 7
VACANCY
NET ABSORPTION
CONSTRUCTION
RENTAL RATE
*Projected, relative to prior period
Q22009
Q3 2009*
2 COLLIERS INTERNATIONAL
UNITED STATES OF AMERICA INDUSTRIAL SURVEY
MARKETEXISTING INVENTORY (SF)
JUNE 30, 2009NEW CONSTRUCTION
Q2 2009 (SF)NEW CONSTRUCTION
YTD 2009 (SF)CURRENTLY UNDER
CONSTRUCTION (SF)
Atlanta, GA 573,676,000 76,000 1,525,000 62,000
Bakersfield, CA 30,579,000 121,000 150,000 822,000
Baltimore, MD 104,349,000 37,000 67,000 0
Boise, ID 31,610,000 733,000 733,000 0
Charleston, SC 30,800,000 25,000 75,000 15,000
Charlotte, NC 162,461,000 171,000 171,000 217,000
Chicago, IL 1,310,449,000 1,737,000 5,139,000 3,041,000
Cincinnati, OH 272,265,000 849,000 1,062,000 289,000
Cleveland, OH 402,807,000 13,000 42,000 26,000
Columbia SC 34,187,000 205,000 389,000 465,000
Columbus, OH 250,048,000 12,000 476,000 476,000
Dallas-Ft. Worth, TX 736,939,000 3,387,000 8,881,000 2,074,000
Denver, CO 270,599,000 142,000 357,000 209,000
Detroit, MI 456,221,000 91,000 226,000 65,000
Fairfield, CA 32,821,000 307,000 307,000 0
Fresno, CA 48,600,000 0 100,000 0
Ft. Lauderdale-Broward Co., FL 127,905,000 421,000 540,000 338,000
Greenville, SC 152,956,000 77,000 154,000 676,000
Hartford, CT 96,975,000 0 0 200,000
Honolulu, HI 37,759,000 0 0 0
Houston, TX 474,032,000 1,443,000 5,762,000 2,566,000
Indianapolis, IN 233,981,000 834,000 1,298,000 3,271,000
Jacksonville, FL 91,000,000 0 1,950,000 340,000
Kansas City, MO 184,589,000 14,000 66,000 1,413,000
Las Vegas, NV 105,878,000 343,000 1,082,000 712,000
Little Rock, AR 46,743,000 0 90,000 750,000
Los Angeles - Inland Empire, CA 377,932,000 536,000 3,440,000 1,322,000
Los Angeles, CA 770,185,000 178,000 932,000 1,902,000
Louisville, KY 94,095,000 650,000 1,082,000 724,000
Memphis, TN 186,511,000 0 100,000 421,000
Miami, FL 227,565,000 325,000 712,000 419,000
Milwaukee, WI 281,000,000 500,000 1,300,000 200,000
Minneapolis, MN 116,948,000 0 0 224,000
Nashville, TN 191,090,000 693,000 1,511,000 828,000
New Jersey - Central 292,454,000 188,000 245,000 184,000
New Jersey - Northern 425,515,000 99,000 145,000 47,000
Oakland, CA 131,233,000 0 0 26,000
Orange County, CA 200,837,000 0 0 0
Orlando, FL 140,405,000 0 20,000 333,000
Philadelphia, PA 426,377,000 1,053,000 1,597,000 2,731,000
Phoenix, AZ 228,629,000 19,000 202,000 1,949,000
Pleasanton/Walnut Creek, CA 32,911,000 0 0 54,000
Portland, OR 177,585,000 83,000 626,000 455,000
Raleigh, NC 39,384,000 230,000 380,000 35,000
Reno, NV 73,236,000 0 32,000 0
Sacramento, CA 185,781,000 0 0 134,000
San Diego, CA 188,449,000 61,000 937,000 251,000
San Francisco Peninsula, CA 40,808,000 0 0 0
San Jose/Silicon Valley, CA 252,976,000 0 0 137,000
Seattle/Puget Sound, WA 287,404,000 426,000 1,007,000 1,312,000
St. Louis, MO 244,000,000 157,000 565,000 1,011,000
Stockton/San Joaquin County, CA 89,193,000 99,000 2,404,000 20,000
Tampa Bay, FL 205,809,000 0 34,000 691,000
Washington, DC 202,035,000 405,000 789,000 1,517,000
West Palm Beach, FL 54,516,000 0 20,000 0
USA TOTAL/AVERAGE 12,465,087,000 16,738,000 48,721,000 34,955,000
COLLIERS INTERNATIONAL 3
MARKETABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
VACANCY RATE JUNE 30, 2009 (%)
Atlanta, GA (1,490,000) (2,232,000) 12.6 12.9
Bakersfield, CA (151,000) 118,000 5.9 6.8
Baltimore, MD (2,257,000) (2,295,000) 19.4 21.6
Boise, ID (829,000) (960,000) 8.9 11.2
Charleston, SC 80,000 383,000 9.9 9.6
Charlotte, NC (305,000) 1,000 8.5 8.3
Chicago, IL (6,756,000) (15,076,000) 11.1 11.7
Cincinnati, OH (1,577,000) (2,747,000) 8.7 9.5
Cleveland, OH (984,000) (2,204,000) 7.5 7.8
Columbia SC (137,000) (79,000) 7.9 7.5
Columbus, OH (767,000) (942,000) 10.1 12.0
Dallas-Ft. Worth, TX (694,000) (1,540,000) 10.7 11.2
Denver, CO (197,000) (1,016,000) 8.3 8.7
Detroit, MI (1,096,000) (1,872,000) 12.4 13.9
Fairfield, CA (502,000) (520,000) 9.7 11.2
Fresno, CA (150,000) (350,000) 7.2 6.9
Ft. Lauderdale-Broward Co., FL (1,060,000) (1,693,000) 8.3 9.4
Greenville, SC 446,000 (98,000) 10.5 10.8
Hartford, CT 0 0 9.4 9.4
Honolulu, HI (21,000) (314,000) 5.1 5.1
Houston, TX (220,000) (21,000) 6.6 6.9
Indianapolis, IN 311,000 841,000 6.8 7.0
Jacksonville, FL (3,200,000) 250,000 9.4 11.7
Kansas City, MO (1,056,000) (2,359,000) 7.2 7.8
Las Vegas, NV (1,423,000) (1,652,000) 11.9 13.5
Little Rock, AR (1,273,000) (1,273,000) 10.3 13.0
Los Angeles - Inland Empire, CA (2,343,000) (5,289,000) 14.6 15.1
Los Angeles, CA (3,801,000) (7,476,000) 4.2 4.8
Louisville, KY (569,000) (694,000) 7.7 8.3
Memphis, TN (959,000) (2,358,000) 13.4 13.9
Miami, FL (1,373,000) (2,843,000) 8.4 9.1
Milwaukee, WI 800,000 (100,000) 8.2 8.1
Minneapolis, MN (1,773,000) (2,623,000) 10.6 12.1
Nashville, TN 565,000 (381,000) 8.2 8.2
New Jersey - Central (1,377,000) (63,000) 9.0 9.5
New Jersey - Northern (2,613,000) (4,246,000) 6.8 7.5
Oakland, CA 891,000 (751,000) 9.2 8.5
Orange County, CA (1,294,000) (2,091,000) 4.9 5.6
Orlando, FL (2,480,000) (3,011,000) 10.7 12.5
Philadelphia, PA 796,000 (391,000) 9.4 9.4
Phoenix, AZ (2,720,000) (4,392,000) 15.6 17.0
Pleasanton/Walnut Creek, CA (181,000) (971,000) 14.1 14.7
Portland, OR (937,000) (1,595,000) 7.4 8.2
Raleigh, NC (1,094,000) (924,000) 18.8 21.5
Reno, NV (696,000) (1,861,000) 14.1 15.3
Sacramento, CA (1,114,000) (1,770,000) 10.9 11.5
San Diego, CA (1,452,000) (1,681,000) 9.7 10.4
San Francisco Peninsula, CA (316,000) (958,000) 7.9 8.5
San Jose/Silicon Valley, CA (2,976,000) (6,828,000) 12.0 12.8
Seattle/Puget Sound, WA (714,000) (1,139,000) 5.8 6.3
St. Louis, MO 375,000 669,000 6.4 6.3
Stockton/San Joaquin County, CA (1,593,000) (1,979,000) 14.8 16.7
Tampa Bay, FL (1,626,000) (2,776,000) 8.3 9.3
Washington, DC (851,000) (1,933,000) 11.5 12.4
West Palm Beach, FL (717,000) (1,550,000) 10.4 11.8
USA TOTAL/AVERAGE (57,448,000) (99,652,000) 9.52 10.16
UNITED STATES OF AMERICA INDUSTRIAL SURVEY
4 COLLIERS INTERNATIONAL
UNITED STATES OF AMERICA INDUSTRIAL SURVEY LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009
MARKETLAND PRICE
(US$ PSF)SALES PRICE
(US$ PSF)CAP
RATE %VACANCY FORECAST
(3 MONTHS)ABSORPTION FORECAST
(3 MONTHS)RENT FORECAST
(3 MONTHS)
Atlanta, GA 1.50 39.00 8.00 Up Up Down
Bakersfield, CA 5.00 48 7.50 Same Same Same
Baltimore, MD 5.74 60.00 8.50 Up Down Down
Boise, ID 3.00 65.00 8.50 Up Down Down
Charleston, SC 2.30 42.00 10.00 Up Same Down
Charlotte, NC 1.95 – – Same Same Down
Chicago, IL 4.37 39.00 8.35 Up Down Down
Cincinnati, OH 2.00 – – Up Down Down
Cleveland, OH 1.32 48.00 10.25 Up Down Down
Columbia SC 1.20 50.00 9.00 Up Down Same
Columbus, OH 2.04 18.35 – Up Down Down
Dallas-Ft. Worth, TX 1.70 39.00 8.70 Up Down Down
Denver, CO 4.00 45.00 9.25 Up Down Down
Detroit, MI – 40.00 8.00 Up Down Down
Fairfield, CA – – – Down Up Same
Fresno, CA 3.00 36.00 10.00 Same Up Same
Ft. Lauderdale-Broward Co., FL – 82.06 9.22 Up Down Down
Greenville, SC 1.31 50.00 8.25 Up Down Same
Hartford, CT 2.30 41.00 9.50 Same Same Same
Honolulu, HI 42.00 – – Up Down Down
Houston, TX 4.00 93.00 10.00 Up Down Down
Indianapolis, IN 1.84 – – Same Same Down
Jacksonville, FL 3.00 40.00 11.00 Up Down Down
Kansas City, MO 1.75 55.00 9.00 Up Same Same
Las Vegas, NV 11.11 127.00 6.20 Up Down Down
Little Rock, AR 2.48 37.50 9.00 Up Down Same
Los Angeles - Inland Empire, CA 7.50 86.00 5.90 Up Down Down
Los Angeles, CA 54.80 113.00 6.00 Up Down Down
Louisville, KY 2.64 32.50 11.00 Up Same Down
Memphis, TN 0.96 30.00 10.25 Same Same Down
Miami, FL 7.94 96.45 7.00 Up Down Down
Milwaukee, WI 2.25 55.00 9.25 Same Same Down
Minneapolis, MN 2.77 48.00 9.75 Up Up Down
Nashville, TN 1.61 – – Down Up Same
New Jersey - Central 12.00 85.00 7.00 Up Down Down
New Jersey - Northern 48.00 100.00 7.50 Down Down Down
Oakland, CA 21.58 65.62 8.00 Down Up Same
Orange County, CA 42.00 140.00 7.20 Up Down Down
Orlando, FL 3.00 65.00 8.50 Up Up Down
Philadelphia, PA 3.45 44.44 9.00 Up Down Down
Phoenix, AZ 3.18 59.22 8.40 Up Down Down
Pleasanton/Walnut Creek, CA 13.44 – – Down Down Down
Portland, OR 14.21 79.17 – Up Down Same
Raleigh, NC 3.00 4.00 10.50 Same Up Same
Reno, NV 3.50 42.54 8.25 Same Up Same
Sacramento, CA 7.00 75.00 7.60 Up Down Down
San Diego, CA 17.04 134.68 – Up Same Down
San Francisco Peninsula, CA – 300.00 – Up Same Down
San Jose/Silicon Valley, CA 63.75 – – Up Same Down
Seattle/Puget Sound, WA – – – Same Down Same
St. Louis, MO 3.00 40.00 9.50 Up Down Down
Stockton/San Joaquin County, CA 55.00 55.00 8.50 Down Up Down
Tampa Bay, FL – 61.00 – Up Same Down
Washington, DC – 95.54 – Up Same Down
West Palm Beach, FL 14.61 74.63 – Up Down Down
USA AVERAGE 10.77 66.88 8.65
COLLIERS INTERNATIONAL 5
MARKETWAREHOUSE/DISTRIBUTION
SPACE (US$ PSF)BULK SPACE
(US$ PSF)FLEX/SERVICE
SPACE (US$ PSF)TECH/R&D
SPACE (US$ PSF)
Atlanta, GA 3.52 3.30 8.38 7.57Bakersfield, CA 4.00 3.95 7.00 –Baltimore, MD 5.99 4.61 9.68 –Boise, ID 5.40 5.40 6.60 6.60Charleston, SC 3.55 4.15 6.00 16.00Charlotte, NC 3.65 3.25 7.50 7.50Chicago, IL 3.93 2.21 9.83 –Cincinnati, OH 2.70 2.70 4.75 –Cleveland, OH 2.90 3.50 8.74 9.00Columbia SC 4.25 4.00 6.50 9.50Columbus, OH 3.15 2.95 – –Dallas-Ft. Worth, TX 3.15 2.95 7.20 8.55Denver, CO 4.00 3.50 9.00 10.00Detroit, MI 4.37 – 9.26 –Fairfield, CA 6.00 – 9.60 –Fresno, CA 3.36 2.40 5.75 7.20Ft. Lauderdale-Broward Co., FL 7.33 6.73 10.10 11.80Greenville, SC 3.12 3.25 7.50 8.00Hartford, CT 5.75 4.50 9.50 9.50Honolulu, HI 13.80 – – –Houston, TX 5.50 4.95 8.38 9.56Indianapolis, IN 4.75 2.85 6.25 –Jacksonville, FL 3.00 3.75 9.00 –Kansas City, MO 4.00 3.50 8.50 12.00Las Vegas, NV 6.46 – 8.64 12.51Little Rock, AR 3.57 – – –Los Angeles - Inland Empire, CA 4.31 4.28 7.45 10.63Los Angeles, CA 6.84 6.75 14.50 15.25Louisville, KY 3.30 3.05 9.00 –Memphis, TN 2.69 2.55 7.72 10.00Miami, FL 7.65 6.74 11.80 –Milwaukee, WI 4.20 3.50 4.55 4.60Minneapolis, MN 4.39 4.23 4.80 4.80Nashville, TN 4.28 3.76 7.49 7.49New Jersey - Central 4.78 4.30 13.77 15.00New Jersey - Northern 5.84 5.26 10.55 15.00Oakland, CA 4.80 6.36 6.76 11.28Orange County, CA 8.01 7.80 14.25 13.85Orlando, FL 5.32 4.95 9.59 9.52Philadelphia, PA 4.00 3.75 7.50 12.00Phoenix, AZ 5.40 8.40 12.84 –Pleasanton/Walnut Creek, CA 4.56 – 10.80 –Portland, OR 5.37 5.36 9.71 8.55Raleigh, NC 4.30 3.75 8.00 10.00Reno, NV 3.84 2.88 8.64 –Sacramento, CA 5.04 3.60 11.04 12.60San Diego, CA 8.52 – 11.76 16.92San Francisco Peninsula, CA 9.96 9.96 21.96 21.96San Jose/Silicon Valley, CA 6.00 8.40 – 13.92Seattle/Puget Sound, WA 7.09 7.81 11.23 12.27St. Louis, MO 3.25 2.75 6.00 15.00Stockton/San Joaquin County, CA 3.60 – 6.00 7.68Tampa Bay, FL 5.13 4.88 9.05 10.49Washington, DC 8.34 – 13.26 –West Palm Beach, FL 7.70 7.57 11.71 11.16USA AVERAGE 5.09 4.59 9.13 10.93Quarterly Change -3.50% -4.89% -0.82% 0.45%
UNITED STATES OF AMERICA INDUSTRIAL SURVEY RENTS AS OF JUNE 2009
6 COLLIERS INTERNATIONAL
CANADA INDUSTRIAL SURVEY AND RENTS
INDUSTRIAL SURVEY
MARKETEXISTING INVENTORY (SF)
JUNE 30, 2009NEW CONSTRUCTION
Q2 2009 (SF)NEW CONSTRUCTION
YTD 2009 (SF)CURRENTLY UNDER
CONSTRUCTION (SF)
Calgary, AB 117,500,000 203,000 1,030,000 300,000 Edmonton, AB 76,000,000 0 0 963,000 Halifax, NS 7,045,000 0 10,000 25,000 Montreal, QC 338,172,000 450,000 516,000 208,000 Ottawa, ON 27,919,000 0 0 209,000 Regina, SK 14,908,000 53,000 53,000 21,000 Saskatoon, SK 18,900,000 200,000 400,000 100,000 Toronto 720,022,000 994,000 5,250,000 3,401,000 Vancouver, BC 174,005,000 1,976,000 2,808,000 2,024,000 Waterloo Region 60,984,000 38,000 141,000 110,000 CANADA TOTAL/AVERAGE 1,555,454,000 3,915,000 10,208,000 7,360,000
INDUSTRIAL SURVEY
MARKETABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
VACANCY RATE JUNE 30, 2009 (%)
Calgary, AB (362,000) 250,000 4.5 5.1 Edmonton, AB (1,963,000) (1,737,000) 3.4 4.2 Halifax, NS 8,000 (15,000) 7.2 7.1 Montreal, QC 1,419,000 422,000 7.1 6.8 Ottawa, ON 69,000 207,000 3.8 4.4 Regina, SK 175,000 (55,000) 2.3 1.4 Saskatoon, SK (105,000) 167,000 2.0 3.6 Toronto (623,000) (4,230,000) 6.4 6.4 Vancouver, BC 76,000 535,000 2.7 3.8 Waterloo Region (192,000) (575,000) 5.7 6.1 CANADA TOTAL/AVERAGE (1,497,000) (5,029,000) 5.70 5.88
INDUSTRIAL SURVEY | LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009
MARKETLAND PRICE
(C$ PSF)SALES PRICE
(C$ PSF)CAP
RATE %VACANCY FORECAST
(3 MONTHS)ABSORPTION FORECAST
(3 MONTHS)RENT FORECAST
(3 MONTHS)
Calgary, AB 11.82 105.00 7.25 Same Up SameEdmonton, AB 12.66 128.00 7.60 Up Down DownHalifax, NS 5.75 – – Same Same SameMontreal, QC 11.00 – – Same Same SameOttawa, ON 9.00 87.00 8.88 Same Up SameRegina, SK 6.08 66.00 8.85 Same Up SameSaskatoon, SK 8.00 100.00 8.50 Up Same SameToronto 13.50 64.50 7.00 Up Down DownVancouver, BC 25.25 100.00 7.00 Up Down DownWaterloo Region 7.41 83.00 7.50 Up Down DownCANADA AVERAGE 11.05 91.69 7.82
INDUSTRIAL SURVEY | RENTS AS OF JUNE 2009
MARKETWAREHOUSE/DISTRIBUTION
SPACE (C$ PSF)BULK SPACE
(C$ PSF)FLEX/SERVICE
SPACE (C$ PSF)TECH/R&D
SPACE (C$ PSF)
Calgary, AB 7.00 6.50 9.25 10.00Edmonton, AB 7.40 6.50 8.15 9.00Halifax, NS 6.75 5.00 8.95 13.95Montreal, QC 4.50 4.00 6.50 8.00Ottawa, ON 7.00 6.88 8.50 10.00Regina, SK 8.00 6.50 12.00 14.00Saskatoon, SK 8.50 7.50 9.00 13.00Toronto 5.50 5.04 7.91 8.57Vancouver, BC 7.00 6.50 8.50 9.50Waterloo Region 5.13 5.13 8.65 8.65CANADA AVERAGE 6.68 5.96 8.74 10.47Quarterly Change -2.94% -3.22% -0.60% -1.99%
COLLIERS INTERNATIONAL 7
MARKETVACANCY RATE JUNE 30, 2008 (%)
VACANCY RATEJUNE 30, 2009 (%) CHANGE
Pleasanton/Walnut Creek, CA 9.2 14.7 5.47
Reno, NV 10.1 15.3 5.14
Los Angeles - Inland Empire, CA 9.9 15.1 5.14
Las Vegas, NV 8.5 13.5 5.00
Stockton/San Joaquin County, CA 11.8 16.7 4.86
Jacksonville, FL 7.0 11.7 4.69
Boise, ID 6.5 11.2 4.64
Columbia, SC 2.9 7.5 4.63
Orlando, FL 8.5 12.5 4.00
Baltimore, MD 18.1 21.6 3.53
San Francisco Peninsula - San Mateo, CA 5.1 8.5 3.43
Raleigh, NC 18.1 21.5 3.41
West Palm Beach, FL 8.4 11.8 3.41
Ft. Lauderdale-Broward, FL 6.2 9.4 3.17
Phoenix, AZ 13.9 17.0 3.09
San Jose/Silicon Valley, CA 10.0 12.8 2.87
Miami, FL 6.3 9.1 2.83
Cincinnati, OH 6.8 9.5 2.76
Charleston, SC 7.1 9.6 2.56
Tampa Bay, FL 6.9 9.3 2.36
Chicago, IL 9.4 11.7 2.30
Columbus, OH 9.7 12.0 2.26
Washington, DC 10.4 12.4 2.02
Nashville, TN 6.2 8.2 1.98
San Diego, CA 8.5 10.4 1.91
Dallas-Ft. Worth, TX 9.5 11.2 1.78
USA AVERAGE 8.44 10.16 1.71 New Jersey - Central 7.8 9.5 1.65
Denver, CO 7.1 8.7 1.62
Los Angeles, CA 3.3 4.8 1.50
Bakersfield, CA 5.4 6.8 1.44
Kansas City, MO 6.4 7.8 1.40
Sacramento, CA 10.2 11.5 1.33
Orange County, CA 4.3 5.6 1.24
Portland, OR 6.9 8.2 1.23
Honolulu, HI 4.0 5.1 1.16
Charlotte, NC 7.2 8.3 1.08
Atlanta, GA 11.8 12.9 1.06
Houston, TX 5.9 6.9 1.05
Fairfield, CA 10.2 11.2 1.00
Minneapolis, MN 11.2 12.1 0.96
Oakland, CA 7.6 8.5 0.96
New Jersey - Northern 6.5 7.5 0.94
Greenville, SC 9.9 10.8 0.90
Fresno, CA 6.0 6.9 0.90
Philadelphia, PA 8.6 9.4 0.84
Detroit, MI 13.1 13.9 0.81
Louisville, KY 7.6 8.3 0.69
Milwaukee, WI 7.5 8.1 0.61
Seattle/Puget Sound, WA 6.1 6.3 0.19
Cleveland, OH 7.7 7.8 0.15
Memphis, TN 13.9 13.9 (0.03)
Hartford, CT 9.9 9.4 (0.52)
St. Louis, MO 6.9 6.3 (0.55)
Indianapolis, IN 8.1 7.0 (1.04)
Little Rock, AR 15.2 13.0 (2.19)
153.5 MSF under construction at the end of the third quar-ter of 2007 and below levels last seen in early 2003.
U.S. industrial vacancy rate again goes higher. The industrial warehouse vacancy rate increased by 63 basis points during the second quarter to register double-digit vacancies at 10.16%. This brought the national vacancy rate back to levels recorded during the second quarter of 2004 and up 122 basis points from the beginning of the year. Out of the 55 markets tracked across the country, 48 saw vacancies increase while seven registered declines. Canadian warehouse vacancies also increased during the quarter, jumping by 18 basis points to 5.88%, a level not seen since 1997.
Rents drop 3.5% during the quarter. For the third consecutive quarter warehouse rents posted a substantial decrease, with average asking rents down 3.5% to $5.27 per square foot. With this latest decrease, U.S. warehouse rents are down 9.0% over the last nine months. Reflecting the widespread nature of the downturn, 47 of the 56 markets surveyed by Colliers showed a drop in average warehouse rents during Q2. Canadian warehouse rents also decreased, falling 2.9% during the quarter to $6.68 per square foot.
GLOSSARY
Absorption – Net change in leased space over a given period of time.
Bulk Space – 100,000 square feet or more with up to 10 percent office space, the balance being general warehouse space with 20 to 36 foot ceiling heights. All loading is dock-height.
Flex Space – Single-story buildings having 10- to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service through distribution, light industrial and occasional heavy industrial use.
Inventory – Includes all existing multi or single tenant leased and owner-occupied industrial warehouse, light manufacturing, flex and R&D properties greater than or equal to 10,000 square feet.
New Construction – Includes completed speculative and build-to-suit construction. New construction quoted on a net basis after any demolitions or conversions.
Service Space – Single story (or mezzanine) with 10- to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade level roll-up doors on the other. Less than 15% office.
Tech/R&D – One- and two- story, 10- to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading.
Triple Net Rent – Includes rent payable to the landlord and does not include additional expenses such as taxes, insurance, maintenance, janitorial and utilities. All industrial and high-tech/R&D rents in this report are quoted on an annual, triple net per square foot basis in U.S. dollars.
Vacancy Rate – Percentage of total inventory available (both vacant and occupied) as at the survey date including direct vacant and sublease space.
Warehouse – 50,000 square feet or more with up to 15 percent office space, the balance being general warehouse space with 18 to 30 foot ceiling heights. All loading is dock-height.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
Industrial Market Contracts Sharply During Q2Continued from page 1
UNITED STATES OF AMERICA INDUSTRIAL SURVEY VACANCY RATES
NORTH AND CENTRAL AMERICACanadaCosta RicaMexicoUnited States of America
SOUTH AMERICAArgentinaBrazilChileColombiaPeru
AlbaniaAustriaBelgiumBulgariaCroatiaCzech Republic
DenmarkEstoniaFinlandFranceGermany
GreeceHungaryIrelandItalyLatviaLithuaniaMontenegroNetherlandsNorwayPolandPortugalRomania
RussiaSerbiaSlovakiaSpain SwedenSwitzerlandTurkeyUkraineUnited Kingdom
AFRICASouth Africa
MIDDLE EASTIsraelQatarSaudi ArabiaUnited Arab Emirates
ChinaHong KongIndiaIndonesia JapanMacauPakistan
PhilippinesSingaporeSouth KoreaTaiwanThailandVietnam
New Zealand
EUROPE
ASIA
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COLLIERS INTERNATIONAL HIGHLIGHTS · NORTH AMERICA INDUSTRIAL · SECOND QUARTER 2009
8 COLLIERS INTERNATIONAL