November 4, 2002—AMB Property Corporation, an owner and operator of industrial real estate, has released its six-month national forecast of industrial space demand, calling for two more quarters of positive net absorption. Net absorption measures the total amount of square feet leased over a period of time, less the space that is vacated during the same period.
Through its Industrial Absorption Indicator (IAI), a model comprised of the Federal Reserve Board’s manufacturing output data and a proprietary algorithm, AMB forecasts 43 million square feet of positive absorption in the U.S. for fourth quarter 2002. Net absorption of less than a million square feet is projected during the first quarter of 2003.
Earlier this year, the AMB IAI predicted positive absorption for the third quarter of 2002, after six quarters of negative absorption. Actual third quarter industrial absorption figures of 14.3 million square feet were reported by Torto Wheaton Research recently.
David C. Twist, AMB’s director of research, said, “The IAI has an 88% correlation to industrial demand six months out, and we are pleased that in May, it correctly predicted positive third quarter absorption. While we don’t interpret our newest positive absorption forecasts as a signal of an imminent strong recovery, we do feel that the worst is over.”
For more information, contact AMB.
