Tucson, Tampa, Long Island, Cincinnati and Portland had the lowest rates, ranging from 5.6% to 7.1%, while Austin, Atlanta, Boston, Phoenix and Baltimore had the highest, ranging from 19.4% to 15.3%. Of the 10 largest markets, Atlanta, Northern and Central New Jersey and Philadelphia saw contractions in availability, but Los Angeles, San Francisco, Dallas, Detroit and Chicago all saw upsurges. Houston remained basically unchanged.
The higher industrial availability reflects the slowdown of the US economy, particularly consumer spending. This trend is very apparent in Southern California, which has experienced corresponding increases in availability rates. The market will continue to see subtle increases in availability rates over the next couple of quarters due to the continued sluggishness of the economy. In addition, new construction was down sharply, from 37.5 million sf in the previous quarter to 25.6 million sf in Q1. The diminishing supply of new product will help keep vacancies from rising significantly higher.
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