Bob - Walt, what you have for us today?
Walt - Good morning Bob, I wanted to update the industrial market this morning and go over some second-quarter numbers.
The industrial market leased some space last quarter, about 100,000 ft.², with mostly smaller tenants. As with most of the markets these days the moves were just trading spaces from one building to another. Unicor moved out of space in the airport area and took 24,000 ft.² on Broadway. DirecTV vacated 15,000 ft.² in the North I-25 corridor and leased 18,000 ft.² in the Westside submarket.
The vacancy rate declined to 9%, which was down slightly from last quarter and up slightly from a year ago.
Any construction of speculative space remains on hold. There was only 30,000 ft.² of construction completions last quarter, which is a very low number.
Asking rates remain unchanged at $6.50 per square foot per year on a triple net basis, with the tenant paying all expenses in addition to rent.
Walt - Bob it does, the current level of jobs in the industrial market is not supporting the amount of space available and therefore this creates a higher vacancy rate. Layoffs, closings, and consolidations all impact the square footage of the leased industrial space.
The current economic growth will leave an impact on industrial market for years to come, unless measures are taken to improve our vacancy for businesses.
Hopefully projects like Admiral Beverage’s 219,000 ft.² distribution center in the South I-25 market, which is expected to deliver in 2013 will impact the employment numbers a little bit, but that’s remains to be seen.
We are experiencing weak economic growth and this has slowed our recovery and consumers are less confident. We are affected by the national economy and will continue to be until some measures are put in place to help small businesses grow.
I don’t think we’ll see any prospective tenants move into the industrial market that will positively impact the vacancy and tenants have the opportunity in this market to take advantage of lower rents and upgrade their facilities by dealing with landlords that are willing to make the necessary enticements to attract tenants.
Bob - How can people contact you to talk about industrial real estate?
Walt - Thanks Bob call Walt Arnold at Sperry Van Ness 256-1255 is my direct line our website is Walt Arnold.com. If you have any questions about commercial state give us a call and let’s talk. Hey Bob, I appreciate the time have a great week and I will talk to next Monday.