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. National vacancy rates continued to increase through the second and third quarters of 2002.
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 2002.
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 sq. ft. or larger. Vacancy rates for industrial space during July-September 2002 ranged from lows of 3.5% in Albuquerque, N.M., 5.6% on Long Island, N.Y., and under 9% in Portland, Ore., Detroit, and Minneapolis/St. Paul, to highs of 21.9% in Jacksonville, Fla., and 21.6% in Austin, Texas.
On the bright side, both Seattle and Austin markets recorded declines of more than 3% 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, N.C., Nashville, Tenn., Kansas City, Mo., San Diego, and Las Vegas metro areas.
Year-to-year increases were steepest in Austin (+12% between Q3/2001 and Q3/2002), Charlotte (+7.6), and Atlanta (+7.1).
Industrial vacancies keep piling up
Percent of total space available for lease in large industrial buildings, third quarter 2002
|Five highest||Five lowest|
|Note: Q3/2002 national average vacancy rate = 11.4%
Source: CB Richard Ellis
|Austin||21.6||Long Island, N.Y.||5.6|