Although the slight improvement in the U.S. economy should translate into an upturn in the market for warehouse/distribution space, warehousing and DC specialist ProLogis delivers a simple pronouncement on the U.S. warehousing market: “We don’t foresee a stunning reversal in the vacancy rate.”
In its report on 30 major distribution and warehouse markets, Prologis notes that even if facility construction starts reach the projected level of 63 million to 68 million sq. ft., that rate would be 50% below the cyclical peak achieved in 1999. In relative terms, however, 2004 should mark an upturn in leasing, with a projected 2.5% increase in demand.
The most positive outlook for this market is in specific locales. Markets that have done well in the last few months are the Los Angeles basin, New Jersey, and Washington, DC. Single-digit vacancy rates also abound in Denver; East Bay San Francisco; Portland, OR; and South Florida.
At the opposite end of the spectrum, local warehousing and distribution markets that have fared the worst include Austin, TX, Louisville, KY, and the San Francisco South Bay area, followed by Atlanta, Baltimore, Dallas, Eastern Pennsylvania, Memphis, Nashville, and St. Louis. Visit www.prologis.com for more information.