News
Americans Buy Stuff; Economy Improves
April 20, 2011
| Bolstered by a rebounding consumer, demand for industrial space is projected to skyrocket to more than 2M SF by the end of this year, Cassidy Turley's Kevin Thorpe tells us. | |||
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| The last two and a half years, people cut back on their purchasesand businesses responded by reducing inventories and shedding warehouse space. Now the consumer is buying more clothing, furniture, electronics, and cars (or the Apple product that combines all four of those), and that's boosted demand for warehouse space, particularly near the airport. Chicago had an especially glowing quarter, accounting for more than half of all net demand for industrial space in the Midwest region and was also one of the leading metros nationally, Kevin tells. Other cities leading the charge: Dallas, Atlanta, and Phoenix. | |||
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| Because vacancies have topped 12%—300 bps higher than Chicago’s historical average—rents will remain low for several quarters, Kevin tells us. Chicago recorded a 1% increase to $4.07/SF in Q1 compared to the previous quarter. But the road to recovery could still be a bumpy one, given recent global events: Increasing oil prices and devastation from the tsunami and subsequent nuclear crisis in Japan has disrupted supply chains in US, particularly forautomakers. Nevertheless, the improving leasing fundamentals have led to more industrial sales in Chicago—sales volume in January to February 2011 registered at $159M, up 700% compared to the same period one year ago. |
