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"New construction has been relatively disciplined, so the market is much stronger," Hamid Moghadam, CEO of global industrial real estate firm Prologis told the Wall Street Journal. "Now we are getting into the more mature part of the cycle. It's more of a balanced market, with modest rental growth."
Availability of industrial space in the U.S., including warehouses and manufacturing facilities, declined for the 27th consecutive quarter, extending the longest streak on record, according to a new report from commercial real estate firm CBRE Group. But the decline is slowing.
The fourth-quarter decline was 8.2 percent, down five basis points or .05 percent from the third quarter, to its lowest level since the first quarter of 2001, according to CBRE. This demonstrated the beginning of a turn, as the average quarterly decline has been 25 basis points over the past six years. Of the 64 major U.S. markets tracked by CBRE, 40 posted declines in available industrial space in the fourth quarter, while 24 showed an increase.
CBRE said the slight slowdown is more likely due to growing supply, not a drop in demand. Since the second quarter of 2010, demand has consistently outpaced new supply in the sector. CBRE defines availability as all space listed as available for lease, including both vacant space and facilities that are occupied but marketed for sublease.
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