Well, I have heard the “good, the bad, and the ugly” from businesses and building owners here in the last couple months. Several groups with whom I am currently working for are considering adding to the capacity of their respective warehouses, and they have mentioned to me that substantial growth is predicted for the coming months and into 2011. On the other hand, I spoke with a company today that is closing its doors in Jacksonville, as well as many others who are holding on for dear life. I believe we will continue to hear about a mixed bag of results for many companies and industries over the next 12-18 months, as the economy makes a slow turn for the better. Now, I don’t believe we will see the heights of 2006-2007 anytime soon, but maybe in 2012, we will start to see small, but steady, growth in our economy.
During a recent conversation with the owners of a local transportation company that ships goods predominantly by rail, they told me that rail activity is picking up, and more freight is being transported. They also said they have seen four straight months of positive growth and believe in 2011, there will be more of the same. The freight increases aren’t huge - and not even close to the market highs, but they do believe the worst of times are behind them. Only time will tell, but if freight is moving, someone is buying and someone is selling, and that is a positive fact to report.
Currently, most building owners are still not ready to part with properties at prices buyers are willing to pay, but the bid-ask gap is narrowing. Most sales and leasing activity has involved industrial buildings smaller than 20,000 SF, with a few larger users poking around the market. Leasing activity was fairly strong in the last two quarters, which was a direct result of landlords’ willingness to do almost anything to fill vacant space, from providing free rent and extensive tenant improvements to offering significant rent reductions. If only sellers would be this realistic!
To summarize… the market is tough but slowly rebounding, and while the economy has taken a beating, business owners are fighting back and will come out of this recession smarter and stronger than before it began. I hope that everyone has a great Thanksgiving and safe travels to wherever their holiday destination may be. Until next time, have fun out there!
Jacob Horsley
NAI Commercial Jacksonville
Industrial Group
