starts in the industrial sector in 2003 were nearly 40% below the sector’s peak in 2000, according to a report from industrial REIT ProLogis (NYSE:PLD). However, 2003 construction starts in the top 30 markets totaled 70 million sq. ft., a 17% increase from 2002.
"This trend of controlledis a welcome departure from the past exuberance that has fueled the boom-and-bust cycles that have dogged the commercial real estate industry," says Leonard Sahling, first vice president of ProLogis and head of ProLogis Research Group.
ProLogis’ second semi-annual research report focused on construction pipelines in the top 30 U.S distribution and warehouse markets. Among the reports other findings:
Last year's increase in new starts was tilted toward "spec" projects, which accounted for 59% of total starts during 2003, vs. 45% during he previous year.
Deliveries, which usually lag starts by six to 12 months, continued to decline during 2003. Newly delivered bulk warehouses and distribution centers accounted for 63 million sq. ft. in 2003, compared with 77 million sq. ft. during the previous year.
Six of the 30 markets reported that new starts more than doubled from 2002 to 2003. These markets include Charlotte, Columbus, Indianapolis, Louisville, Northern New Jersey and Phoenix.
Four of the 30 markets reported no new starts at all during 2003. They were Austin, San Francisco Bay, St. Louis and Tampa.