U.S. industrial market ending year on a positive note

According to Jim Dieter, executive vice president, industrial brokerage, U.S. Cushman & Wakefield, the tenant movement centered on efficiencies is breeding cautious optimism

By ·

Supply chain efficiencies remain a primary focus for industrial space users nationwide heading into the final weeks of 2010, said a leading industrial brokerage firm.

According to Jim Dieter, executive vice president, industrial brokerage, U.S. Cushman & Wakefield, the tenant movement centered on efficiencies is breeding cautious optimism.

“And as movement begins to pick up among tenants, especially in the country’s major intermodal markets, we will end the year optimistic regarding fourth-quarter performance and a positive outlook heading into 2011,” he said.

Dieter said that vacancy rates appear to have stabilized, and he does not see anything on the horizon that will alter this welcome news. The overall vacancy rate for the U.S. industrial market remained at 10.6 percent at the end of the third quarter of 2010, unchanged from midyear, after peaking at 10.8 percent at the end of the first quarter.

Indeed, half of the 34 industrial markets Cushman & Wakefield tracks registered a quarter-over-quarter decrease in vacancy rates. Among them, Boston saw a 1.4 percentage point decrease, to 18.8 percent; Portland, Ore., recorded a 1.3 percentage point decrease, to 7.3 percent; and Contra Costa, Calif., had a 0.7 percentage point decrease, to 14.0 percent.

Leasing totals reached 189.8 million square feet through the first nine months of 2010, an 11.9 percent increase from the 169.5 million square feet leased during the same period in 2009. Twenty U.S. industrial markets charted a year-over-year leasing increase.

“Much of this activity revolves around companies’ drive toward increased supply chain efficiencies,” said Dieter.

In one notable trend, the brokerage is seeing a shift toward companies taking more, but smaller, distribution buildings closer to their consumer bases. This is especially prevalent among big-box retail.

“We also are seeing more companies being drawn to major intermodal markets. These multi-faceted transportation hubs can be a key part of improving logistics because they enable tenants to use multiple means – rail, truck, air and water – to move goods,” said Dieter.

As such, first-tier intermodal markets like Chicago, Memphis, Dallas and Harrisburg, Pa.; and even second-tier markets like Kansas City, Mo., likely will see healthy growth in 2011 and beyond, Dieter added.

“Rail hubs will remain integral to the industrial sector as well, providing one of the most consistent and reliable transportation modes in the face of unpredictable fuel and freight pricing, and ever-increasing road congestion,” he said.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
How Lean is your Lean Quality Program?
Avoid quality program bureaucracy that can sap logistics productivity and increase costs
Download Today!
From the September 2016 Issue
Indecision revolving around three complex supply chain elements—transportation, technology and organizational structure—finds many companies waiting to commit to a strategic path. However, waiting too long will only result in a competitive disadvantage that will be difficult to overcome in today’s fast-paced, global economy.
Time for Asia’s ports to rebuild
Is the freight recession upon us…again?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Supply Chain Best Practices: Visibility to In-Transit Inventory
During this webcast you'll learn on how various organizations have gained instant access to in-transit parcels and given access to this information to stakeholders.
Register Today!
EDITORS' PICKS
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...

Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....