Industrial market should improve in coming years

Industrial property conditions may improve.

Commercial property managers involved in the industrial market may experience improving conditions in the next few years, as recovery continues to pick up.

The commercial industrial market should see improvement in effective rents by 2017, according to a report from Prologis. This figure should rise by as much as 25 percent during that period. Much of this is due to the increasing demand in recent months, which signals positive conditions in the future.

"The U.S. industrial cycle is clearly building on positive momentum and showing signs of expansion," said Chris Caton, vice president and head, Prologis Research. "New construction starts remain low, demand is increasing, and the housing market and e-commerce are playing an increasingly larger role."

With a low level of available space in the commercial market in the next several months, many conditions have improved for property management companies, the report added. This strengthened rent growth levels in both high- and lower-priced properties.

The low level of new properties may continue in the near future, as the level of private construction fell more than 2.5 percent in January from the end of 2012, according to a report from the U.S. Department of Commerce. Additionally, the nonresidential construction rate fell more than 5 percent month-over-month.

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