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Industrial Vacancy Falls
July 13, 2010 11:33 AM
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A July 12 article in chicagorealestatedaily.com (powered by Crains Chicago Business) reported a trend-breaking drop in the industrial vacancy rate from 12.3% to 11.9% in the second quarter. You gotta love it when a 10 quarter trend is disrupted for the first time in 2 years. Colliers International who tracks 21 submarkets in Chicagoland is giving us something positive to talk about in the industrial real estate market. They also reported a positive result in "net absorption" which turned positive after nine straight quarters in the negative numbers. Net absorption measures the change in the amount of leased and occupied space compared with the prior period. A negative 32 million square feet of negative absorption took place in the 9 quarter period prior to the 2nd quarter. 2.1 million square feet of positive absorption took pace in the 2nd quarter. The article said that the Fox Valley submarket was one of 7 submarkets that experienced positve absorption. Is this a trend in the making? Perhaps. Some of the larger industrial firms are reporting a pipeline of big deals in the works. The deals that are getting done are getting done at rates and terms very favorable to the tenants. This tenant's market is expected to continue until the net absorption rate remains positive for a few more periods.
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