Search
 

Bulk Distribution Vacancy Up, Starts Well Down

DENVER-A just-released mid-year market analysis by the world's largest dealer in distribution facilities finds deliveries and vacancy on the rise and starts quickly dropping off.

By Brian K. Miller | Updated on September 16, 2008

DENVER-A flood of new bulk distribution and warehouse product in the first half of the year increased vacancy and pushed down asking rates, according to two mid-year reports that released Tuesday by ProLogis, the world’s largest dealer in distribution facilities.

In its mid-year US Property Market Review, ProLogis said “weakness from the sluggish US economy has begun to spill over into the nation’s top distribution property leasing markets,” pushing the overall vacancy rate in the to 8.3% from 7.8% at the start of the year and knocking down asking rents for the first time in more than three years.

The good news is that demand for distribution space held up “surprisingly well,” according to the report, and that the development pipeline appears to be slowing to a trickle thanks to tighter lending standards, more cautious equity capital and more prudence on the part of the major, well-capitalized developers.For the top 30 markets, net absorption remained positive at 36 million sf during the first six months of the year, which ProLogis described as “a far better showing than real estate analysts had foreseen.” The net absorption means occupied space (or realized demand) grew at a 1.4% annual rate during the first half of the year, which compares to 2.5% annual growth for all of 2007.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.