"Demand for space is fair, at best," says Jim Wilson, senior director for the Phoenix office of Cushman & Wakefield of Arizona Inc. "Consumer confidence needs to improve and we must see clear signs of the economy improving before our industrial real estate market will rebound."
Vacancies are up 0.7% from the end of 2001 and 2.4% higher than first quarter 2001. Wilson predicts vacancy will decrease as the year progresses as long the current demand continues and new construction naturally slows. Only 1.5 million sf of new industrial space is under construction in comparison to 3.7 million sf that was rising a year ago.
"Our pace of demand is not much different today than it was three months ago," says Wilson. "However, the industrial market is notorious for swift changes in cycle. When we recover, it can result in rapid absorption of existing space. We're optimistic that such a rebound will occur by early 2003.
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