Looking for signs that the Midwest’s industrial real estate market is on the mend? The Colliers International 2010 Fourth Quarter report provides it.
According to the report the Midwest cities of Chicago and Cincinnati each saw positive industrial absorption of more than 1 million square feet in the fourth quarter of 2010. These two markets ranked among the best in that category among the 55 largest industrial markets that Colliers profiled in its report.
The strong showing of Cincinnati and Chicago, along with positive absorption in many other markets across the country, led to a strong fourth quarter for industrial real estate, according to Colliers. The report said taht the national industrial property sector absorbed 28.6 million square feet of space during the fourth quarter of 2010. That turned what had been a net loss for 2010 into a solid gain by year’s end.
And if you’re really looking for a reason to celebrate, consider this quote from a press release summarizing the report: “This robust fourth quarter activity likely heralds the beginning of the next up cycle for the industrial sector as demand for warehouse spaceis expected to rise.”
Commercial real estate professionals have gotten used to bad news regarding their industry. But as 2011 moves toward the end of its second month, industry reports are filled with more positive news. The multi-family market is already strong. But the office market is starting to rebound, too. This, along with the noticeable improvement in the industrial market, is cause for at least some relief on the part of commercial real estate pros.
This isn’t to say that life in the industrial world is all cheery. The Colliers report is careful to temper expectations. It points out, for instance, that depsite the gains this segment has seen in net absorption, the average asking rents for industrial space declined a bit in the fourth quarter to $4.60 a square foot.
But it’s not time for gloom. Let’s conclude with a positive bit of news from the Colliers report: The overall industrial vacancy rate across the nation dropped to 10.74 percent in the fourth quarter.
“The national industrial market has made a significant rebound and is positioned to meet, and possibly exceed, growth expectations in 2011,” said Dylan Taylor, chief executive officer for Colliers International in the United States. “The fundamentals continue to improve, and barring any unforeseen events, we are confident that the industrial sector will have an extremely positive year.”