The Expert: Availability Increases Accelerate in Q1

The industrial availability rate for the Torto Wheaton Research (renamed CBRE Econometric Advisors) Sum of Markets increased 80 basis points to 12.2 percent in the first quarter of 2009. This marks the sixth consecutive quarter of rising availability rates and the highest national availability rate in Torto Wheaton’s history, which dates back to 1989. The previous high, of 11.7 percent, came in the first quarter of 2004. The pace of increase has not yet reached that set during the 2001 recession, when the national rate increased 110 basis points in the second quarter of 2001.Of the 63 markets CBRE Econometric tracks, 59 showed increases. Among the larger industrial markets, Chicago’s availability rose 80 basis points to 13.5 percent, Los Angeles’ 100 basis points to 6.5 percent and Atlanta’s 110 basis points to 15.7 percent. California and Florida host six of the 10 markets that have the largest availability increases. Both states continue to suffer from the foreclosure crisis, and California is also dealing with the ongoing decline in port traffic. Houston; Salt Lake City; Edison, N.J.; Charlotte, N.C.; Fort Worth, Texas; and Albuquerque also posted quarterly increases of at least 100 basis points. These markets are widely dispersed and are all feeling the effects of the current recession. In addition, availability rates in Ann Arbor; Chicago; Columbus; Detroit; Miami; Phoenix; St. Louis; Tampa; Sarasota, Fla.; Stamford, Conn.; and Trenton, N.J. reached historical maximums.Further job losses nationwide and the continued slowdown in industrial production and global trade will exert additional upward pressure on industrial availability in the coming quarters. Many industrial markets are likely to surpass their previous availability peaks as we move through 2009.Laura Stone-Mortimer is vice president & senior economist for CBRE Econometric Advisors.