"The US vacancy rate declined from its high of 11.3% in the first quarter of 2003, to 10.4% by the fourth quarter, and it appears to be continuing its downward trend this year," he adds. Key findings of the report include:
* Market fundamentals should continue to improve during 2004, suggesting the US vacancy rate will continue to decline during the year and should be below 10% by year-end.
* Rent growth tends to be a lagging indicator, and most property owners do not expect to see net effective rents heading higher until market occupancies reach the 92% to 93% level--probably not before late 2004 or early 2005, in most cases.
* The cyclical recovery has been broadly based, even at this early stage,with occupancy rates rising in 20 of the top 30 markets.
* Individual markets that are expected to recover faster than others include the Los Angeles Basin, Northern New Jersey and Phoenix.
* Individual markets that are expected to recover slower than others include San Francisco's South Bay, Charlotte, El Paso, Cincinnati and Denver.
"Looking ahead to the next 12 to 18 months, if the US economy continues to recover, so should the nation's warehouse/distributionmarkets," Sahling says. ProLogis has 247.5 million sf in 1,790 distribution facilities owned, managed and under development in 70 markets in North America, Europe and Asia.
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