VACANCIES at US industrial properties - including warehouses and distribution centers - remained at 7.2 percent in the first quarter, as businesses held off expanding amid slowing consumer demand and rising unemployment.
The average industrial vacancy rate in the three months ended March 31 was unchanged from a year earlier and from 2007's fourth quarter, according to data released on Friday by New York-based real estate brokerage Cushman & Wakefield Inc.
The rate likely will rise over the rest of 2008, said Michael McKiernan, Cushman's executive managing director for industrial brokerage.
"It's just the general economic conditions - that's what really bends industrial property," he told Bloomberg News.
"Real estate is a lagging indicator. We're probably 18 months before we start to see general improvement from the corporate occupiers."
In March, United States imports dropped the most in six years as purchases of furniture, automobiles and telecommunications gear declined and a falling dollar made overseas goods more costly, the Commerce Department said late last week. The national unemployment rate was 5.1 percent in March, the highest since September 2005.
The average rent at warehouses, the largest category of industrial space in the US, was US$6.31 a square foot in the first quarter, unchanged from a year earlier and down from US$6.37 in the previous three months, Cushman said.
Warehouses account for almost two-thirds of the US industrial property market.
The four regions with the lowest vacancy rates in the first quarter were all in Southern California. Los Angeles's central area had a vacancy rate of 2 percent, down from 2.5 percent a year earlier.
The vacancy rate in Los Angeles's northern region dropped to 2.6 percent from 3.3 percent, southern Los Angeles rose to 2.8 percent from 2.5 percent, and Orange County increased to 3.5 percent from 3.3 percent, Cushman said.
Southern California is home to the ports of Los Angeles and Long Beach, the US's largest cargo port complex.
"It's just unbelievably tight," in the Los Angeles area, McKiernan said.
"For all intents and purposes, LA is full."
The two areas with the most significant increases in vacancies were California's Inland Empire region, where the rate rose to 6.2 percent from 5.7 percent a year earlier, and Pennsylvania's Interstate 81 and Interstate 78 distribution corridor, where the rate jumped to 12.2 percent from 9.9 percent.
New space added in both regions, particularly the Inland Empire, has boosted vacancies.
"There's been some significant new construction there, and that's why it's been jumping," McKiernan said.