Look for the industrial property market to lead the pack as the real estate industry recovers from the recession, advises Maria Sicola, senior managing director of research at New York-based Cushman & Wakefield. According to Sicola, the industrial sector will fare better than office, multifamily, retail and hotel due to the continued growth of industrial tenants, such as the healthcare, pharmaceutical, education and defense industries, during the downturn.
In a recent C&W industrial property market report, year-end 2001 vacancy rates only rose 6% — to 8.1% — by the end of 2000. New construction completions totaled 132 million sq. ft., consisting mostly of speculative warehouse/distribution space. Virtually no new manufacturing space was delivered in 2001, resulting in only a minimal increase in the overall manufacturing vacancy rate.
In 2002, approximately 84.5 million sq. ft. is scheduled for delivery to the market, with 74% speculative development. The majority of the new construction is concentrated in Ontario, Calif., Chicago, central and northern New Jersey, Atlanta, Dallas, Detroit, Ft. Lauderdale and Louisville.