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U.S. Industrial Leasing Activity Increases in 1Q 2010, While Construction Completions Hit Historic Low
6 May, 2010, New York
Cushman & Wakefield today released its first quarter U.S. Industrial MarketBeat report, which shows leasing activity has increased year-over-year, while construction completions have reached a record low.
Industrial leasing activity increased 10.3 percent from the first quarter of 2009, totaling 60.4 million square feet at the end of the first quarter of 2010. The majority of U.S. industrial markets reported an increase in leasing activity year-over-year, with Orange County, Atlanta, Jacksonville and the Greater Los Angeles Area reporting increases of more than 1 million square feet each.
"The improvements in retail sales and consumer confidence have been positive leading indicators for the industrial real estate market," said Maria Sicola, executive managing director and head of Americas Research for Cushman & Wakefield.
While the overall vacancy rate for the U.S. continued to increase - reaching 10.8 percent at the end of the first quarter of 2010 - the number of markets that saw a quarterly decline in vacancy increased.
Limited construction completions sustained and kept vacancy increases low in other markets. Just 3.2 million square feet of new space was added during the first three months of the year, a fraction of the five-year quarterly average of 26.2 million square feet, and the lowest amount of construction completions since Cushman & Wakefield began tracking the U.S. industrial market.
"While we did see an increase in projects currently under construction, the majority of these are being built on a build-to-suit basis, which bodes well for absorption," said Jim Dieter, executive vice president of Cushman & Wakefield's U.S. Industrial Services. "We expect to see positive absorption in the U.S. and its major markets in the near future."