For the third consecutive year, the monitor finds that the logistics business is the primary driver of demand for industrial space. Los Angeles retained the top spot on the list due to its proximity to the busiest ports in the US, negligible vacancy level and shortage of developable land. Other cities with nearby port facilities also achieved high rankings. Houston took second spot, while Oakland, CA. and Seattle tied for fourth, Miami grabbed eighth, Portland, OR ninth and New Jersey 10th. The only inland distributions hubs to make the top 10 were Atlanta at No. 3, Dallas at No. 6 and Chicago at No. 7.

While Grubb & Ellis senior vice president and chief economist Robert Bach says the economy will struggle in 2009, dampening demand for all product types and resulting in negative absorption and increased vacancy, he notes that ultimately, the industrial market will recover more quickly than the office market because the construction pipeline is set to thin out sooner.