The two-plus year-old recovery of U.S. industrial real estate markets will extend into 2013, according to a new forecast from Los Angeles-based CBRE Group Inc.
CBRE expects the national industrial availability rate to fall to 12.2% in 2013 and 11.3% by the end of 2014. These rates will decline from 13.1% in the third quarter of 2012; the national industrial availability rate peaked at 14.6% in the second quarter of 2010.
Forty-one of the 58 metro areas tracked by CBRE are reported to be on a recovery path, with positive demand foreseen for the next 12 months. Texas markets continue to perform well, CBRE says, with both Houston and Fort Worth now below their 10-year historical average availability rate level. Some select markets have already seen rents fully recover; in Denver, for example, effective industrial rents have increased by 16% over the past year and are now more than 3% above their pre-recession peak.
‘U.S. industrial markets continue to struggle against a residual overhang of space stemming from the last recession and weak economic fundamentals, which has limited demand,’ says Arthur Jones, senior managing economist at CBRE Econometric Advisors. ‘Nevertheless, steady absorption over the past two years has finally reduced available space to the point where property owners in select markets can now command higher rents. While economic and fiscal policy uncertainty continues to constrain demand, we expect the recovery of industrial real estate to accelerate over the next two years.’