Greater Los Angeles once again led the nation in leasing volume, with 7.7-million-square-feet in activity through March, although that was a 16% decrease from last year's first quarter. The Dallas/Fort Worth area came in second with 6.8-million-square feet, a 13% increase. Seven markets posted double-digit gains during the first quarter, with Northern New Jersey up 43% over last year, and Philadelphia up 74%.

Users continue having difficulties finding top-tier industrial space, and that has pushed up rents. Average asking rates increased in most of the major markets tracked by Cushman & Wakefield, with the direct average climbing from $5.73-per-square-foot to $6.03-per-square-foot since last year. Houston topped the list with a 10.3%average rent increase.

“The supply/demand imbalance also continues to fuel construction activity, including both build-to-suit and speculative product,” Morris noted. “Virtually all of the top markets are seeing construction pipelines return to near pre-recession levels.”

Developers in the Dallas/Fort Worth area and California's Inland Empire lead the nation in construction, with 16.5-million-square-feet and 14.8-million-square-feet of total volume, respectively. Significantly, in Dallas/Fort Worth, developers are doing 14.4-million-square-feet of that total on spec. C & W expects developers to complete 85.8-million-square-feet by the end of the year, with 51.7-million-square-feet on spec.

“Moving forward, we are watching a number of private sector developments that will likely add near-term momentum to the industrial real estate market's positive trending,” Morris said. “Among them, we anticipate a continuing revival of the housing sector, the activation of pent-up consumer demand and rising export volume. Most importantly, we are beginning to see a shift in business attitudes and a greater willingness to take risk, which will lead to stronger employment growth and increased investments in people and equipment.”