Just as the economy shows signs that it's poised for recovery, so too is the warehouse industry. A recent study by ProLogis, the Aurora, Colo.-based provider of distribution facilities and services, suggests that warehouse vacancy rates will recede in 2004.

The study predicts that a "cyclical upturn" in the warehouse and distribution property markets will reduce vacant space. New construction starts are expected to total between 63 million and 68 million square feet—a notable increase over last year's 58 million square feet. That could jump to 72 million square feet next year, the company's analysts predict.

ProLogis' study also projects that warehousing space and construction in the Los Angeles Basin area, Reno and Las Vegas, Nev., and several New Jersey markets are likely to spring back faster than the national average.

On the other end of the spectrum, San Francisco's South Bay submarket, Louisville, Ky., Baltimore, Dallas, St. Louis, Cincinnati, Ohio, and Tampa, Fla. are all expected to ride the comeback trail at a slower pace.

For a copy of the report, visit http://ir.prologis.com/downloads/marketreview1203.pdf.