Back-to-Back Quarters of Robust Demand for Industrial Properties Showing Significant Progress towards Recovery, According to Cassidy Turley Report

WASHINGTON, July 15, 2011 /PRNewswire/ -- The industrial sector continues to make impressive strides towards recovery, despite the recent economic slowdown, according to a recently published report by Cassidy Turley, a leading commercial real estate services provider. Industrial vacancy has steadily trended downwards for 12 straight months -- falling 30 basis points (bps) to 9.2% in the second quarter of 2011 from the prior quarter.  

U.S. net demand for industrial warehouse space registered at 21.9 million square feet (msf) the first quarter of 2011, following a 24.2 msf gain in the fourth quarter of 2010.  

"The current pace of net demand for industrial space is on par with activity experienced during the robust real estate years of 2005 and 2006," said Kevin Thorpe, Chief Economist at Cassidy Turley.  "Although the U.S. economy clearly decelerated in the first half of 2011, a number of positive trends germane to the industrial sector suggest the outlook should remain upbeat."

Following are key highlights in Cassidy Turley's Industrial Trends Report:

• The industrial expansion is now occurring in most areas throughout the country.  Of the 67 metropolitan areas tracked, 49 markets recorded positive demand and 43 observed a decline in vacancy. Markets that led during the second quarter in 2011 include Dallas (+3.6), Central NJ (+2.8), Indianapolis (+2.4 msf), Detroit (+2.1) and Houston (+1.5).  

• In the second quarter of 2011, average asking rents registered at $5.08 NNN, up from $5.05 in the prior quarter.  Given the quick turnaround in demand, there are now an increasing number of markets (nearly half) beginning to push rents higher.

• During the second quarter 2011, just 5.0 msf of new industrial inventory were completed in the U.S., down from 6.0 msf in the prior quarter.  There was only 20.3 msf of industrial space under construction at the end of the second quarter 2011.  For perspective, the U.S. industrial sector typically delivers 73 msf per year -- the historical average dating back to 1993.  

• Sales of industrial properties had been lagging behind other commercial real estate sectors for most of 2011, but that trend is changing.  According to Real Capital Analytics, investment sales rose to $1.8B in May of 2011, up 78% compared to May of 2010.  

Mr. Thorpe added, "Although we are currently seeing positive trends in the industrial sector, the road ahead will remain bumpy, as is generally the case following any deep recession since WWII.  As we check the scorecard midway through 2011, we observe that the industrial sector has made significant progress towards recovery, and the preconditions are set for the progress to continue."  

Cassidy Turley's quarterly U.S. Industrial Trend Report is available on the company's website: http://www.cassidyturley.com/research/market-reports/market-report/mktid/133/interior/1

About Cassidy Turley

Cassidy Turley is a leading commercial real estate services provider with 3,200 professionals in 60 offices nationwide. The company represents a wide range of clients -- from small businesses to Fortune 500 companies, from local non-profits to major institutions.  The firm completed transactions valued at $17 billion in 2010, manages 430 million square feet on behalf of private, institutional and corporate clients and supports over 25,000 domestic corporate services locations. Cassidy Turley serves owners, investors and occupiers with a full spectrum of integrated commercial real estate services -- including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. In 2010, the firm enhanced its global service delivery outside of North America through its partnership with GVA. Please visit www.cassidyturley.com for more information about Cassidy Turley.

SOURCE Cassidy Turley