BIG PICTURE: Industrial Developers Wait on Sidelines for Rebound

PORTLAND-Industrial tenants and developers seem to be sharing space on the sidelines of the market these days, generally speaking, as bankruptcies, layoffs and consolidations continue to slow demand and put sublease space back on the market.

Only tenants with lapsing leases and developers already in the ground appear to be cutting deals these days, while building owners are busy trying to keep lease rates from falling. Still, with overbuilding not the problem it was last time around, the mood is generally upbeat, as many industrial brokers predict a turnaround by the end of the year.

GlobeSt.com’s Southwest bureau chief Connie Gore reports that the Texas industrial market is flexing its muscle as a strategically located hub, but deals still have been slow in coming. Prospective space takers, say the brokers, are jittery about the US economy and possible forced consolidations to hold onto profit margins. The Dallas-Ft. Worth region hasn’t been hit like Austin, where sublease space seems to grow larger each day due to high-tech cuts. Still, the value-office or office-flex market in the state capital isn’t as hard hit as class-A office, says Greg Johnson, vice president of leasing for Transwestern Commercial Services’ Austin office.