BOSTON—The general outlook for leasing in the industrial sectorcontinues to be “very positive,” CEO Ben Butcherof Stag Industrial said Tuesday on a first-quarterconference call. Speaking for his Boston-basedREIT as well as the sector on a macro basis,Butcher noted that “net absorption is expected to continue to bedramatically higher than the supply.” STAG's own leasing activitywas “significant” throughout Q1, he said.

Driving that positive outlook is a continuation of trends thesector experienced in 2013. “Continued general economicimprovement, shortening and flattening the supply chains,” as wellas an “onslaught of manufacturing” will continue to drive demandfor industrial space over the next couple of years, Butcher said.“Even even some moderate slowing of the economic growth will notchange the generally positive outlook.”

In recent months, Butcher noted, “the potential for oversupplyhas begun to creep into some specific market commentary—Dallas,Houston and Southern California in particular. These are marketswhere we're generally not active and to the extent we are active,it would be in product where we would have a significant costutility advantage on the new spectrum of product.”