In a comprehensive forecast of the 2011 industrial real estate market, Grubb & Ellis expects gradual recovery to return to the sector's leasing market. Since the U.S. industrial market hit bottom in the second quarter of 2010 with a 10.9 percent vacancy rate, demand has begun to pick up due to a rise in consumer spending that drove demand for imports.
Vacancy rates dropped to 10.6 percent in the third quarter, and finished the year at 10.4 percent. Now markets such as California's Inland Empire are experiencing renewed demand, again driven by imports.
In 2011, the vacancy rate will hit an estimated 10.1 percent by the end of the year, and 9.3 percent by the end of 2012. And industrial properties in areas near transportation hubs (Chicago's O'Hare and Los Angeles' South Bay) will see user demand spike.
While recovery is expected to strengthen, the effect of fuel prices on expansions remains uncertain.
To see the full interactive presentation, visit Grubb & Ellis.