Demand for industrial space improving

Industrial demand is on the rise.

The U.S. commercial market improved due to an industrial demand increase during 2011, according to a report from Marcus & Milichap.

During the fourth quarter alone, tenants took up 29.1 million square feet of industrial space, which was the largest improvement since 2007, the report said, according to GlobeSt.com. For the entire year, a total of 97 million square feet was absorbed, which was six times more than 2010.

Cities with a significant amount of port activity led the way in the industrial sector, as Houston and Los Angeles had the most activity with Seattle close behind, according to the news source. Property managers in these areas witnessed higher demand for large industrial properties, as well as an increase in rent growth.

"The U.S. continued to capitalize on the strength of international trade flow, business investment, technology and manufacturing, later aided in large measure by the energy sector and the resurgence in consumer demand," Alan Pontius, managing director of the national office and industrial properties group of Marcus & Millichap, told the news source.

The report added that rental growth is expected to improve when the current supply begins to meet the demand in the market.

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