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May 12, 2014

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50 THE JOURNAL OF COMMERCE MAY 12.2014 WAREHOUSING AND INDUSTRIAL REAL ESTATE SPECIAL REPORT THE WAREHOUSE AND distribution cen- ter industry grew strongly in 2013, and this momentum has continued into the first quarter of 2014. "The outlook for 2014 is that the industrial market will remain very healthy," said Blaine Kelley, senior vice president of CBRE's supply chain practice. What's especially encouraging about the rebound in industrial real estate is that it has touched virtually every mar- ket in the U.S. Kelley said 49 of the 50 largest markets experienced growth. Vacancy rates at port-dependent distribution centers, inland distribution hubs and e-commerce facilities continue to move lower. The national vacancy rate for industrial properties at the end of 2013 was 8.3 percent, down from 10.6 percent in the first quarter of 2010. Although CBRE hasn't released its numbers for the first quarter of 2014, Kelley said the decline in vacancy rates nationwide continued into the new year, and the national vacancy rate in the industrial sector is likely to edge lower as the year progresses. An important indicator of the health of industrial real estate is the level of busi- ness inventories. "Inventories are closely correlated to demand for industrial space, as goods are stored in warehouses before they are sold," Kelley said. Business Strong, consistent growth in inventories puts industrial real estate space at a premium nationwide By Bill Mongelluzzo

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