Promising forecast for inventory control
December 13, 2010 - SCMR Editorial
Regardless of how corporations are executing their supply chain strategies, the end result is that they again are doing something with their industrial real estate.
As noted in today’s news story (“U.S. industrial market ending year on a positive note”) this movement already is beginning to chip away at available inventory nationwide. Absorption is improving notably. At negative 6.2 million square feet through the third quarter of 2010, this number is significantly better than the negative 118.5 million square feet recorded at the end of the third quarter of 2009.
2010 is on track to see the most limited amount of new construction added to the United States industrial inventory since Cushman & Wakefield began tracking the market. We expect that the lack of new product (12.3 million square feet of completions through the third quarter of this year, as compared to 136 million square feet completed during 2008) will push this absorption into the black by as early as mid-2011. This will alleviate the prolonged downward pressure on rents that we have experienced during the past two years.
This all is encouraging news going into 2011. At this time next year, the industrial brokerage firm hopes to be reporting a truly healthy picture illustrated by a continued check on new construction, lower vacancies, positive absorption and healthy rent increases.
Until then, SCMR joins them in looking forward to watching the beginnings of the turnaround grow into tangible, positive near-term progress.