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Cornforth of AMB Property Corp.

'Global trade is the most important number to watch as it explains roughly 80% of the historical variation in demand.'

By Ryan Clark | Updated on August 28, 2009

The embattled industrial market finds itself under multiple attacks from slowing trade and production, rising gas prices, space consolidation and the like. With all these factors working against it, we asked our audience last week in our GlobeSt.com Quick Poll, how the industrial market will do. The votes came in with a perfect 50-50 split decision as to whether or not it will rebound with the rest of the economy or it will take longer to bounce back. We turned to Jay Cornforth, managing director of the East Region at AMB Property Corp. to place a tie-breaking vote.

“It will take longer, as historically industrial real estate vacancies start falling about three or four quarters after GDP growth turns positive. That said, [AMB Property] believe this recovery will be a little quicker since vacancies and new supply were at relative healthy levels heading into the downturn.”

“Our current snapshot of the market remains very challenging on the operating front with continued downward pressure on rents. This downward trend is moderating and we expect to hit bottom by year-end. The national vacancy rate has increased to 13% due to continued negative absorption of space. So, there is much work to be done including the back-filling of existing space before occupancy or rents can grow in a meaningful way. We believe we could be as far as a year way from that point.”

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