Written by Raymond Torto, the firm's global chief economist, the report shows industrial economic rent increased 5.7% in '06 and 3.6% in '07, indicating the downward trend preceded the recent credit crisis. But despite the trend, indications are the decline will not lead to a repeat of the scenario from early in the century, when economic rents actually declined by 4.4%.

In fact, Torto advises major investors to continue investing but to do so cautiously, with appropriate analysis and assumptions undertaken beforehand. "Real estate is an investor's market, not a trader's market, and for long-term investors, opportunities will arise from others' mispricing or misfortune," he says.

The report lists several markets that demonstrate exceptional strength. Markets anticipated to show substantially higher than average economic rent increases include:

• Indianapolis 10.7%
• San Jose, CA 10.6%
• Akron, OH 9.4%
• New York City 7.9%
• Pittsburgh 7.9%

Construction also appears to be heading down, based on the most recent Architecture Billings Index from the American Institute of Architects in Washington, DC. The index, for which any score above 50 shows an increase in billings, is commonly used as a signifier of construction activity nine to 12 months down the line. Following a three-month stretch of strong increases in demand for design services, the January index dropped to 50.7, compared to 55.0 in December.