Industrial, office vacancies decline, report says

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Vacancy rates for industrial and office real estate declined in 2006, according to real estate brokerage Colliers Turley Martin Tucker’s annual “The State of Real Estate” report. The findings include:


-Industrial vacancy rates have been declining since reaching a recent peak of 9.1 percent in 2002, ending 2006 at 6.5 percent.
-5.5 million square feet of modern bulk space was built in 2006—almost 2.5 times what was built in 2005.
-Speculative buildings cause vacancy rates for modern bulk space to vary greatly. The rate ended 2006 at 10.9 percent, up from 7.5 percent at the end of 2005.
-Submarkets: downtown continues to struggle, southwest leads in net absorption.
-Vacancy rates overall were down 0.3 percentage points over year-end 2005, closing 2006 at 16.6 percent.
-Net absorption for the overall market ended 2006 at 418,000 square feet, compared with 315,000 square feet in 2005.
-Submarkets: The north/Carmel submarket is hot, with most new tenants vacating downtown space.
-Multifamily housing was the star in 2006, with at least 31 transactions, where 9,900 apartment units switched hands.
-Sales of industrial buildings were up in 2006 but represented a smaller total amount of square feet changing hands than in 2005.
-Office building sales totaled $403 million in 2006, with 30 properties changing ownership. That’s down from 2005’s $775 million, which was skewed by a few mega deals.
-Seven major sales of multi-tenant retail space combined for a grand total of 573,000 square feet in 2006.
-Land positions have been snapped up along the 146th Street corridor in Hamilton County, the Interstate 65 corridor in Boone County, and surrounding the Interstate 70 exit at State Road 39 in Hendricks County.

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