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While a US economic slowdown persisting through Q1 and into Q2 will essentially keep economic rent for office space flat in 2008, industrial rent is projected to climb 2.8%, according to the February edition of CB Richard Ellis Viewpoint. The report defines economic rent as market average rent multiplied by market occupancy rate, which provides a measurement equivalent to the change in gross income for occupied space.

Written by Raymond Torto, the firm’s global chief economist, the report shows industrial economic rent increased 5.7% in ’06 and 3.6% in ’07, indicating the downward trend preceded the recent credit crisis. But despite the trend, indications are the decline will not lead to a repeat of the scenario from early in the century, when economic rents actually declined by 4.4%.

In fact, Torto advises major investors to continue investing but to do so cautiously, with appropriate analysis and assumptions undertaken beforehand. “Real estate is an investor’s market, not a trader’s market, and for long-term investors, opportunities will arise from others’ mispricing or misfortune,” he says.

The report lists several markets that demonstrate exceptional strength. Markets anticipated to show substantially higher than average economic rent increases include:

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