Can industrial vacancies get any worse? Sadly, yes
With industrial production and manufacturing sector employment levels continuing to fall right into the final quarter of 2002, it’s not surprising that demand for production and warehouse space continued weak right into the fall of last year. The national availability rate for industrial space increased from 11.2% during the second quarter of 2001 to 11.4% during the same period of this past year.
The Q3/2002 industrial vacancy rate was 1.9 percentage points higher than that recorded during the third quarter of 2001. This CB Richard Ellis survey measures the supply of available space in manufacturing plants and warehouse buildings of 100,000 square feet or larger. Vacancy rates for industrial space during July-September 2002 ranged from lows of 3.5% in Albuquerque, 5.6% on Long Island, N.Y., and under 9% in Portland, Detroit, and Minneapolis/St. Paul, to highs of 21.9% in Jacksonville and 21.6% in the Austin, Texas, metro area. On the bright side, both Seattle and Austin markets recorded declines of more than three percentage points between the second and third quarters of 2002.
Between the second and third quarters of 2002, industrial vacancy rates rose most sharply in the Charlotte, Nashville, Kansas City, San Diego, and Las Vegas metro areas. Year-to-year increases were steepest in Austin (up 12.0 percentage points between Q3/2001 and Q3/2002), Charlotte (+7.6), and Atlanta (+7.1). Despite its dubious distinction as the metro market with the highest industrial vacancy rate during the third quarter of last year, Jacksonville did see space availability decline by an encouraging 3.8 percentage points from the same period a year earlier.
(Daryl Delano, Reed Business Information Economist)