Recovery in the national industrial market is taking its own sweet time, according to first-quarter data. The national vacancy rate — currently at 9.82% — will decline about 50 to 75 basis points through the remainder of 2004, with rents mostly flat for warehouse/distribution space and sliding a bit more for R&D/flex space.

Statistics by Product Type as of 1Q 2004
Warehouse/Distribution General R&D/Flex Industrial
Total Sq. Footage 4.8 billion 2.7 billion 1.01 billion
Vacant Sq. Footage 459 million 229.3 million 155.4 million
Vacancy Rate 9.56% 8.41% 15.4%
Asking Rent $4.39 $5.42 $9.47 (Per Sq. Ft.)
Under Construction 37.4 million 17.4 million 4.7 million (Sq. Ft.)
Source: Grubb & Ellis


Net rents for national office tenants declined by 5.5% in 2003, according to the Studley Effective Rent Index 2004. That drop, coupled with a 6.5% increase in concessions, more than offset the rise in non-rent components such as operating expenses (up 3.9%), real estate taxes (up 5.2%) and electricity costs (up 0.7%).


California, Florida and Texas continue to outperform other states in shopping center gross leasable area (GLA). Together, they account for 27.3% of the nation's total GLA. By contrast, the sparsely populated states of Wyoming, South Dakota, Alaska, Vermont, North Dakota and the District of Columbia are home to less than 1% of the nation's GLA.

Ranking of States by Gross Leasable Area (GLA) (as of 2003)
Rank State GLA (in millions of sq. ft.)
1 California 735.7
2 Florida 469.1
3 Texas 395.8
4 Illinois 274.6
5 Ohio 262.6
6 Pennsylvania 262.2
7 New York 261.0
8 Georgia 199.1
9 North Carolina 194.1
10 New Jersey 184.8
Source: International Council of Shopping Centers


Due to the lucrative market of prescription drugs, drugstores are one of the fastest growing components of the retail sector. The mean asking price for drugstores is 71% greater than that of the entire net-leased retail sector, according to a report by The Boulder Group.

Drug Store Market Facts as of 1Q 2004
Total Available Net-Lease Properties 615
Total Value $2.5 billion
Mean Price $4.2 million
Mean Capitalization Rate 7.5%
Source: The Boulder Group


Generations move in different directions and Gen Xers — building careers and “settling down” — are blazing new migration trails. The news is that pricey, glitzy, lifestyle-only cities are not cutting it with those in the 25-to-39 age range. Gen Xers select a mix of interior and coastal states with metro areas known for their New Economy, knowledge jobs and general employment growth, without the sting of high housing costs.

Greatest Gen X Metropolitan Migration Gainers* (Net Domestic Migration Gains, 1995-2000)
Atlanta 98,019
Dallas 58,774
Phoenix 55,774
Denver 53,795
Las Vegas 47,824

Greatest Gen X Metropolitan Migration Losers* (Net Domestic Migration Losses, 1995-2000)
Los Angeles/Long Beach -83,013
New York -63,659
Miami -35,120
Honolulu -23,316
San Diego -22,105
*Among metropolitan areas with more than 500,000 population
Source: William H. Frey analysis of 2000 Census data