Industrial Sector - Fall 2013

The Great Recession hit the industrial real estate sector particularly hard.  In a relatively short time businesses failed, available tenants evaporated, many buildings became “bank- owned” and vacancies sky rocketed to over 30%.  The speculative buildings were the first to fail.  Other properties lost key tenants due to the recession.  Particularly hard to witness were the strong businesses that simply could not survive the downturn and left a once active property vacant and often in declining repair.  The resulting vacancies flooded the market with available industrial and flex-space buildings.  Prices plummeted 70% to $30-$40 per square foot for some properties.  The market is slowly working through the available inventory but this has been devastating for the market and until the supply of distressed properties is absorbed do not expect much new construction in the industrial sector.