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Q3 Reports Reveal Sector Faces Challenging Times

Economic doldrums affecting the US in general have finally caught up with the industrial market.

By John McCloud | Updated on November 12, 2008

The economic doldrums affecting the US in general have finally caught up with the industrial market. Q3 reports from both Cushman & Wakefield and Grubb & Ellis show across-the-board declines in market fundamentals.

C&W reports leasing activity fell 12.7% to 208.7 million square feet for the first three quarters compared to the same period last year. It also reports negative absorption of 8.8 million square feetfor the quarter, the first time in five years the figure has not been in the positive column. The contrast between this year and last is particularly striking, as the market showed 66.1 million square feet of positive absorption for Q3 2007.

G&E agrees leasing activity has fallen, but it calculates positive absorption of 13.4 million square feet for the quarter, a slight improvement from Q2 but a third the pace set a year ago. By its estimation, the figure would have been even higher were it not for completion of 31.2 million square feet of new space.

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