Industrial Vacancy Climbs to 9.5%

The Cincinnati market, usually an industrial powerhouse, has not seen vacancy rates dip this low in years. This number is expected to continue climbing through 2009, according to Thomas McCormick, SVP and principal with CTMT's local office. "Based upon the data and market activity, the vacancy rate for Cincinnati's industrial market will continue to climb through most or all of 2010," he tells GlobeSt.com. "The current vacancy rate of 9.54% already exceeds the vacancy peak we experienced in mid 2002."

Contributing to the rising vacancy will be the shuttering of several major plants here. In the second half of 2009, Avery Dennison Corp. will shutter its 148,000-square-foot building here in Hamilton. Likewise Betts USA Inc. will close its 63,000-square-foot facility and SUMCO Phoenix Corp. has plans to shutter its 190,000-square-foot plant by next June.

The absorption numbers are even more telling of the current situation. During Q2, new absorption was a negative 1.6 million square feet. Year-to-date net absorption totals a negative 2.7 million square feet, according to the report.

McCormick believes the market will begin to see the owner-occupied segment reviving first. "Small and midsize buildings, 10,000 square feet to 100,000 square feet, will start to transfer at an increasing rate in 2010 as sellers recognize that 2005 values are notattainable and lenders begin putting money in play."