COHEN ON REAL ESTATE

Notes from 2012 CCIM Commercial Real Estate Outlook Conference

Wednesday, Jan 18, 2012 @ The Coral Gables Country Club

Presented by Mike “The Dock High Guy” Silver, First VP CBRE and SIOR.

Presentation:    2012 Industrial Trends – Mike Silver

Compare Mike’s presentation to Tom Dixons presentation at the recent CIASF:  http://wp.me/p24jQp-m

First you will notice the difference in SF. Tom doesn’t include Flex or Manufacturing.  Additionally, Mike quotes rental rates to two decimal places while Tom uses ranges.  For example; Mike’s report shows Airport-West Industrial rates at $8.55 PSF (IG) while Tom quotes a range of $7.50-$9.50 PSF.    Additionally, the sub market boundaries are quite different.  Having said that, the reports match up.  Mike’s report is quarterly and so shows trends a lot quicker.

Summary

• No new construction in 2011.
• Still a Tenant market but that will change.  Many tenants are attempting to extend and blend.
• Land prices half of the 2007 peak.
• +ve absorption in 2010 of 4.8MSF

Predictions

• 2011 should have another 4 MSF in +ve absorption.
• US Manufacturing should drive uptick in Industrial Recovery
• Cargo up significantly due to dredging of Port
• Rental Rates and sales prices will be up in suburban markets but not older inner core.
• E Commerce – 400 websites in US.  Will drive traffic.
• Re-Shoring – Rising labor costs and high reject rates bringing jobs back to US.
• Some new construction planned but not until 2013.