As Ten-X's top “sell' markets are clustered mainly in one region, so are the firm's top “buy” markets—in this case, the western US. Phoenix, Oakland, San Diego and Seattle all benefit from robust gains in employment and population, although to varying degrees the markets would soften in a downturn scenario. Nashville leads the firm's list of markets in which investors should consider buying industrial properties, especially with the metro area's current employment levels running 21% above the previous peak.

On a national basis, Ten-X finds that industrial vacancies have fallen to 8.2%, their lowest levels since 2000. Vacancies on a national basis could fall as much as the mid-7% range by the end of 2018, a level below their 1990s cyclical lows.

Ten-X projects effective rent growth averaging more than 3% annually through 2018 as the market grows tighter. However, the firm's analysis posits a 2019-2020 recessionary model that would boost vacancies to 9.2% three years from now.

IRVINE, CA—Vacancies for US industrial are at their lowest levels in nearly 20 years thanks largely to technology-driven demand, Ten-X said Wednesday. E-commerce's positive influence on space absorption has already been well documented; less widely noted is the growing demand for cloud-server farms.

Conversely, low oil prices mean that the energy sector is no longer the spur to industrial leasing that it was in former years. And while trans-Pacific commerce is giving a leg up to Southern California in particular, Ten-X sees cause for concern in the current administration's evident hostility toward trade. Moreover, the global economy has been “stuck in a rut,” as the firm puts it.

“Technology is steadily deepening its impact on the American economy, and it's doing so in a way that benefits industrial real estate in a meaningful way,” says Peter Muoio, chief economist with Ten-X. “In fact, our forecast indicates that technology's positive impacts on this asset class, at least for now, are proving strong enough to offset damage caused by weak oil prices and an uninspired global economy. While the industrial sector still seems to be in good health, one of the biggest question marks facing it arises from potential shifts in US public policy that could one day come to suppress trade flow.”

In a world where oil prices are hovering around $50 per barrel, it's not surprising that four of the top five markets in which Ten-X believes owners should consider selling their industrial properties are in Texas. Houston, San Antonio, Dallas and Fort Worth all make the cut, although San Antonio's economy is not notably tied to the energy sector. Coming in at third in the rankings for “sell” recommendations is Indianapolis, where weak industrial demand undercuts solid growth in employment and population.

As Ten-X's top “sell' markets are clustered mainly in one region, so are the firm's top “buy” markets—in this case, the western US. Phoenix, Oakland, San Diego and Seattle all benefit from robust gains in employment and population, although to varying degrees the markets would soften in a downturn scenario. Nashville leads the firm's list of markets in which investors should consider buying industrial properties, especially with the metro area's current employment levels running 21% above the previous peak.

On a national basis, Ten-X finds that industrial vacancies have fallen to 8.2%, their lowest levels since 2000. Vacancies on a national basis could fall as much as the mid-7% range by the end of 2018, a level below their 1990s cyclical lows.

Ten-X projects effective rent growth averaging more than 3% annually through 2018 as the market grows tighter. However, the firm's analysis posits a 2019-2020 recessionary model that would boost vacancies to 9.2% three years from now.