March 8, 2004—The Society of Industrial and Office REALTORS’ (SIOR) 2004 Comparative Statistics market data report reveals that the vacancy rate for industrial real estate has stabilized at 10.2 percent nationally, almost unchanged from last year. In the office real estate market, however, the vacancy rate increased last year, from 15.1 percent to 16.2 percent.
SIOR expects the industrial vacancy rate to improve this year — back into the single digits. However, the forecast for the office real estate market projects that vacancies will increase before there is a recovery. In fact, more and more office markets are falling in dramatically high vacancy ranges. There are 21 markets in serious distress with a 20 percent or higher vacancy rate.
“SIOR’s 2004 Comparative Statistics data reveals that a rebound has begun for the industrial real estate market,” said David T. Houston, President of SIOR and Colliers Houston & Co. “The office market has stabilized and should improve towards the end of 2004, if the current rate of economic recovery continues. Office markets typically follow industrial markets.”
A comprehensive look at national and local markets is available in book form in SIOR’s annual Comparative Statistics of Industrial and Office Real Estate Markets.
Findings for some major markets include:
- Most dramatic change in 2003 for the Chicago industrial market was a 28 percent increase in sales and leasing for the bellwether category of buildings between 50,000 sq. ft. and 125,000 sq. ft., due to a combination of downward pressure on lease rates and an upswing in landlord incentives.
- Investment sales market for the Washington, D.C., office market was high as buyers competed for downtown office properties. Many well- located assets received more than 10 offers each from prospective buyers.
- In Houston, companies are continuing to migrate outward from the 610 Loop, which should lead to an increase in suburban office occupancy rates, therefore, downtown office space may continue to experience low occupancy levels for an extended period of time.
For more information, contact SIOR.
