Declining Imports Weigh Down Industrial Market

While several large markets have seen demand for industrial properties fade, coastal markets have been hit particularly hard, as the impact of lagging imports, declining demand for construction and home improvement-related products and continuing fallout from the subprime mortgage catastrophe crystallize, according to an Americas MarketView from CB Richard Ellis Inc. The report, “All Eyes on Washington as Financial Crisis Deepens,” by director of Americas research operations Raymond Wong, notes that as consumers pull back their spending habits, import demand falters. Moreover, the report states that “businesses are keeping inventories lean,” which also drags down demand for industrial space. The industrial sector is not projected to fare as badly as it did in the early 1990s and 2001, but the report contends that demand for industrial space will not reverse until fiscal conditions improve, consumers up their spending habits and new construction kicks off.