Southern California Industrial Real Estate Blog

SOCAL INDUSTRIAL REAL ESTATE SNAPSHOT – SEPTEMBER 2010

By Jodi Summers

There’s a lot of blah blah blah as to the recovery has stagnated and how the universe is on the precipice of collapsing into itself, that’s a lot of pre-election fervor. The experts say, “Fundamentally both the economy and corporate balance sheets are in better shape than reflected in the current sentiment.”

In the industrial sector, manufacturing employers continue to add payroll for the seventh straight month, adding 36,000 positions in July. According to a recent Research Brief blog from Marcus & Millichap, an 8% year-to-date rise in imports spurred the creation of 25,000 trade, transportation and utilities positions.

Here are the CoStar Group’s latest Industrial Market Statistics

Ø 13 million SF of positive net absorption in 2Q 2010. This is the first positive reading since mid-2008.

Ø .The national vacancy rate decreased from 10.1% to 10%, the first drop in over two years. Availability also slightly decreased from 14.8% to 14.7%.

Ø Real Capital Analytics reports that single tenant industrial cap rates had a weighted average of 8.5% in 1Q 2010. 85 basis points higher than the same period last year.

Industrial Market Conditions

Ø Occupancies have leveled off.

Ø Many tenants choose not to move and instead remain in their current space and negotiate more favorable terms.

Ø Due to negative demand, development is down.

Current Industrial Trends

Ø Companies have shifted to leasing space rather than owning, preferring to invest their capital in their core products/ product development (i.e. Coca Cola).

Ø Current Buildings that have been around for decades are becoming functionally obsolescent to meet modern design specifications.

Ø Rental rates are low; demand will need to raise rents, raising cap rates, spurring new development.

Positive Indicators

Ø When demand finally turns around, industrial has a short construction cycle and can respond quickly.

Ø Building obsolesces will account for a huge increase in demand beyond the economic recovery.

Hang on, we will get through this.

We’re here to help you with industrial properties. Please contact Jodi Summers - jodi@jodisummers.com or 310.392.1211, and let us move forward together.

**

http://blog.marcusmillichap.com/

http://marcusmillichap.files.wordpress.com/2010/08/graph_lg3.png

http://www.edd.ca.gov/About_EDD/pdf/urate201010.pdf

http://www.globest.com/blogs/netleaseinsider/-301645-1.html?ET=globest:e23095:277110a:&st=email

http://www.labormarketinfo.edd.ca.gov/?pageid=1003

http://www.realestatechannel.com/industrial-market-strength-forecast.jpg

http://www.safetyresource.net/images/ggonpants.jpg

http://www.pullman-museum.org/main/prg337.jpg

INCREASE IN IMPORTS AND EXPORTS BRINGS NEW INDUSTRIAL REAL ESTATE DEVELOPMENT

By Jodi Summers

Cargo volume at our neighboring ports of Los Angeles and Long Beach posted a 28% annual increase in the first quarter, inspiring developers to build more warehouse space in Southern California.

Developers Highland Fairview recently broke ground on an industrial hub about 72 miles east of Los Angeles. The initial phase will encompass 2.6 million square feet, most of which has been leased to Skechers USA Inc., which will be is consolidating operations from five facilities.

The project is expected to create 1,100 construction jobs and, once completed, house more than 3,000 employees, observed Iddo Benzeevi, Highland’s chief executive. “You now see a trend in the marketplace where big companies are consolidating their logistics operations,” Benzeevi said. “The diversity of industries we have here is what continues to drive the demand for this kind of space.”

**

http://www.knoxnews.com/news/2010/apr/09/industrial-property-market-recovery-seen-2011/

http://www.laalmanac.com/images/Port%20of%20Long%20Beach.JPG

http://graphics8.nytimes.com/images/2007/07/31/automobiles/533-port.jpg

http://www.socalindustrialrealestateblog.com/wp-content/uploads/2008/01/PortofLAlogo.jpg

https://www.cushwake.com/cwglobal/docviewer/AmericasEconomicPulseMAY2010.pdf?id=c33600033p&repositoryKey=CoreRepository&itemDesc=document&cid=c27400005p&crep=Core&cdesc=binaryPubContent&Country=GLOBAL&Language=EN&just_logged_in=1

http://www.skechers.com/

EXPORT YOUR PRODUCT IN L.A. - PORTS SOLICITING BUSINESS TO GROW INDUSTRIAL REAL ESTATE MARKET

By Jodi Summers

Combined, the ports of Los Angeles and Long Beach, which together handle about 40% of the nation’s cargo container shipments, but with 71% of their business devoted to imports, Los Angeles and Long Beach were more dependent on U.S. consumer spending than any other major seaport in the nation. When the recession hit, exports diminished, and L.A. County’s valuable warehouse market became noticeably less valuable.

In 2006, when cargo traffic at the local ports peaked at a record 15.8 million containers, the industrial vacancy rate shrank to an extremely tight 3.7%, calculates Thomas Galvin, regional research analyst for Colliers International. But by the fourth quarter of 2009, when the twin ports moved only 11.8 million containers in their worst year since 2003, the basin’s industrial vacancy rate climbed to 8.3%, Galvin said.

Businesses, such as trucking firms and third-party logistics companies, that developed to support the flood of imports into Southern California, scaled way back or folded.

Competing ports such as Oakland had less exposure, with only 52.2% of its traffic coming in imports. The Oakland warehouse market is currently one of the strongest in the country.

Our local ports are trying to move away from their reliance on imports, and follow the model of ports with a more balanced flow of imports and exports. The Port of Los Angeles has been reaching out to small businesses about the potential to increase their sales by exporting their goods, shares Jim MacLellan, director of trade services.

At the port of Long Beach, “We have people traveling around the country, talking to potential exporters and asking them to bring their business here,” concludes port spokesman Art Wong.

**

http://articles.latimes.com/2010/mar/29/business/la-fi-ports-exports29-2010mar29

http://www.socalofficerealestateblog.com/wp-content/newuploads/2010/03/port-of-la.gif

http://www.icis.com/blogs/asian-chemical-connections/17650-15%257EContainer-Ship-in-Port-Los-Angeles-California-Posters.jpg

http://www.livetradingnews.com/wp-content/uploads/NA-AX063_LAPORT_G_20090413195352.jpg

SOCAL INDUSTRIAL REAL ESTATE SNAPSHOT – AUGUST 2010

By Jodi Summers

Industrial property prices are on the rise! Port-area California industrial prices stabilized early in year, and now, the U.S. industrial real estate is headed into recovery after six quarters of negative absorption.

“For owners, the warehouse sector is still working through some significant market turbulence,” the CoStar Group reported in its State of the Commercial Real Estate Industry Mid-Year 2010 Industrial Review & Outlook. “Broad-based growth in rental rates probably won’t resume until 2011, and the investment sales market remains choppy, with total transaction volume still well below the historical average. Liquidity hasn’t yet returned for owners and industrial capitalization rates and pricing, though improving, still show a mixed picture.”

In Los Angeles County, Grubb + Ellis reports that for 2^nd quarter, the vacancy rate declined slightly for the first time in five consecutive quarters to 3.3%, while quarterly net absorption was positive for the first time in over a year with 471,861 square feet. Asking rental rates continued their year-and-a-half-long decline, reaching a quarterly low of $0.45 per square foot –a rate not seen since the late 90s — inspiring sale and leasing activity to a four-year-high of 11.4 million square feet.

Our positive net absorption is on par for national industrial real estate Country-wide, records report 13 million square feet of positive net absorption in the second quarter — the first positive reading since mid-2008. This is huge, as it brings to a close to, what the experts call, “A period that has experienced far more severe and dramatic demand declines than the years of the dot-com collapse and economic recession of the early 2000s.”

Records show that in 2009, every major metro market except Houston saw negative absorption, with significant losses in Chicago, San Francisco and South Florida. Oakland and Los Angeles began to strengthen in the first quarter. The ports of Los Angeles and Long Beach have been aggressively pursuing export development in Los Angeles County, strengthening our warehouse market in the process.

In Los Angeles County, the Downtown area saw its industrial vacancy rate decrease by -0.1% year-to-year, Mid-Cities increase by +1.9%, San Fernando Valley by +0.2% and the San Gabriel Valley decreasing by -0.5 percentage points over the second quarter of last year. Finally, the South Bay area industrial vacancy rate slightly increased in the second quarter when compared to the second quarter of last year.

Our port numbers are impressive. The Los Angeles Economic Development Corporation reports that the total number of containers handled in June at the ports of Los Angeles and Long Beach rose by +29.6 percent on a year-over-year basis to 1,250,418 TEUs (twenty-foot equivalent units). Despite the recession, this was the seventh consecutive month of year-to-year increases and third consecutive month of TEU container totals above one million. Impressively, the Port of Los Angeles experienced the largest gain in trade volumes over the year, as total containers grew by +32.3 percent in June. Noteworthy economic achievement: this was the busiest June in the history of the Port of Los Angeles, even surpassing June in the peak year of 2006. The Port of Long Beach also witnessed a very strong gain in volumes as total containers were up by +25.8 percent on a year-to-year basis.

The success of our ports, is driving the regional industrial market. In second-quarter 2010 more than half of the top 20 industrial markets tracked by CoStar saw positive absorption, led by Southern California. Warehouse leasing in the Inland Empire led the country with 4.8 million square feet, followed Orange County, CA (4.5 million sf), and far ahead of the other growth areas - South Florida and Philadelphia, which each gained 2.8 million sf.

Don’t get too excited, liquidity has yet to return to the industrial market. Properties are sitting on the market far too long, and many are not being sold. Deals that are being done tend to involve creative financing and seller carrybacks.

If your investing, CoStar notes that cap rates on industrial deals of $20 million and above fell to 8%, due to demand by institutional investors who will pay more for high-quality assets. Low-profile industrial investments are yielding cap rates from 8.5% to 9%.

“Net leases or really sale leasebacks play an important role in the market and that role will continue to grow as companies turn to the real estate that they own in order to generate capital,” observes Gordon Whiting, founder and Senior Portfolio Manager of Angelo. “It is also a good time to be an investor in net leased real estate as prices are lower than they have been in many years, cap rates are up and they provide steady current income with the possibility for long term capital gains.”

We’re here to help you with industrial properties. Please contact Jodi Summers - jodi@jodisummers.com or 310.392.1211, and let us move forward together.

**

http://www.globest.com/blogs/netleaseinsider/-300881-1.html?ET=globest:e22792:277110a:&st=email

http://www.portoflosangeles.org/maritime/stats.asp,http://www.polb.com

http://www.portofoakland.com/

http://www.laedc.org/eedge/index.html#7

http://www.costar.com/News/Article.aspx?id=222199DB507C4529AEB9E4E34A07CCFB&ref=100&iid=191&cid=383F14EEE265B182474DA2442BACBBBF

http://www.realestatechannel.com/industrial-market-strength-forecast.jpg

http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef0120a876ad50970b-600wi

http://www.laedc.org/businessscan/charts/0710/vacancy.jpg

http://www.laedc.org/businessscan/charts/0710/vacancy_area.jpg

http://www.realestatechannel.com/commercial.php

http://www.grubb-ellis.com/SitePages/GetFileFromDB.ashx?type=9&id=672

ASIAN TRADE INCREASES SHOULD BOOST PORT ACTIVITY + BOLSTER THE WAREHOUSE MARKET

By Jodi Summers

The International Monetary Fund (IMF) released its 2010 World Economic Outlook… and the good news is the world economy to grow by +4.2% in 2010. Advanced economies are predicted to grow at a much slower pace than the emerging economies. The economies of developed nations are predicted to grow by +2.3% in 2010, with the U.S. economy outperforming both the Euro Area and Japanese economies over.

It is the developing economies that are of particular interest to the Lost Angeles warehouse market. Emerging economies are projected to expand by +6.3% this year, with the Chinese and Indian economies outperforming the rest of the world, growing by a very robust +10.0% and +8.8%, respectively.

This is good news for us, as the Los Angeles Customs District expects international trade with developing countries to boost our local economy, as well as port revenues, and warehouse leasing / sales statistics.

The Los Angeles ports’ top five trading partners are forecasted to expand by:

* China (+10.0%)

* Japan (+1.9%)

* South Korea (+4.5%)

* Taiwan (+6.5%)

* Thailand (+5.5%)

**

http://www.laedc.org/eedge/index.html#4

http://www.socalofficerealestateblog.com/wp-content/newuploads/2010/03/port-of-la.gif

http://abclive.in/thumbnail.php?file=IMF_994875137.jpg&size=article_medium

SOCAL INDUSTRIAL REAL ESTATE SNAPSHOT – JUNE 2010

By Jodi Summers

In the first quarter of 2010, the industrial vacancy rate in L.A. County stood at 3.4 percent. Local industrial property owners are concerned because this is the first stretch the Los Angeles County industrial vacancy has been above 3% since the first quarter of 2004. (We were @ 2.7% in 1Q 2009.)

On the bright side, Los Angeles has the second strongest industrial property market in the country, this side of Oakland. We are complaining about vacancies, but let’s put it in perspective, industrial availability nationally was at 14% in 1Q 2010.

Our slow economy has weakened demand for industrial space in all parts of Los Angeles County. The Los Angeles Economic Development Corporation reports that downtown area saw its industrial vacancy rate increase by +0.9% year-to-year, Mid-Cities by +2.8%, San Fernando Valley by +1.1% and the San Gabriel Valley increasing by +1.9 percentage points over the first quarter of last year. Finally, the South Bay area industrial vacancy rate slightly increased in the first quarter when compared to the first quarter of last year.

Those who know say industrial rents are close to stabilizing. Notes Lawrence Yun, chief economist for the National Association of Realtors, “These sectors should see gradual improvement after jobs pick up and create additional demand for space, meaning a broader improvement in commercial real estate is likely in 2011.”

Here are the reasons why our industrial real estate sector with strengthen:

• Los Angeles is the largest manufacturing center in the U.S., employing 376,500 workers in 2007. The most important sectors are: apparel with 56,700 workers; fabricated metals with 49,100 workers; food products with 43,000 workers; aerospace products & parts with 38,100 workers; and search, detection & navigation products with 26,987 workers.

• International trade is a major driver of the area’s economy. The Los Angeles Customs District - which includes the ports of Long Beach and Los Angeles, Port Hueneme, and Los Angeles International Airport -is the nation’s largest. The value of two-way trade passing through Los Angeles totaled $357.3 billion in 2008, compared with $353.4 billion for second-place New York. Major investments are under way to expand the ports, LAX airport and related transportation facilities in Los Angeles County. The International Trade Trends & Impacts report by the LAEDC forecasts import and export trade through the Los Angeles Customs District should increase by 9% to $308.5 billion, while the number of containers moved at the ports of Los Angeles and Long Beach will grow by 10.2% in 2010.

“The global economic downturn was a huge problem in 2009, as the economies of four of the Los Angeles Customs District’s top five trading partners dropped into recession,” said LAEDC Chief Economist Nancy Sidhu, Ph.D. “However, all five economies have now returned to growth mode, which bodes well for international trade activity in 2010.”

The steady increase of export volumes helped by the early recovery in the Asian economies will contribute to the growth in international trade activity. It is also expected that Southern California will strengthen economic and personal ties with China.

The good news is that L.A. is strengthening its port and transportation hubs to accommodate the projected growth.

“Capacity at the local ports has been a concern in the past, but expansion plans are moving again,” observes LAEDC Founding Economist Jack Kyser.

In addition to the port terminal expansion projects, both railroads serving Southern California have increased their track capacity to important destinations in the Midwest and Southeast. The Federal government’s economic stimulus package and the possible implementation of Mayor Antonio Villaraigosa’s 30/10 Initiative is expected help fund key highway and bridge projects in the Los Angeles region.

**

http://www.costar.com/News/Article.aspx?id=359D8A406145159176A40807B924DC84

http://www.grubb-ellis.com/research/reports.aspx

http://www.laedc.org/businessscan/charts/0510/vacancy_area.jpg

http://www.laedc.org/businessscan/charts/0510/vacancy.jpg

http://latimesblogs.latimes.com/money_co/2010/05/vacancy-rates-will-continue-to-rise-in-most-types-of-commercial-real-estate-such-as-office-and-industrial-buildings-until-the.html

http://www.laedc.org/reports/LA%20County%20Profile.pdf

http://www.laedc.org/newsroom/releases/2010/100512_InternationalTrade.pdf

HOW MANUFACTURING + INDUSTRIAL REAL ESTATE FIGURES INTO THE ECONOMIC DOWNTOWN

By Jodi Summers

Now that we are coming out of the recession, the statistics are coming in. According to a report by Cushman + Wakefield, the manufacturing sector was one of the hardest hit in the recent economic downturn. Bet you didn’t know that more than 15.8% of all the manufacturing jobs in the US were lost in the recession, which is why the usually strong industrial marketplace took such a huge hit.

California cities with the highest proportion of employment in manufacturing include: Orange County (11.3%). San Francisco (11.1%) and Los Angeles (10.2%). As you might expect, all three of these cities have seen above-average employment declines.

An interesting national trend, in the 10 cities where employment has fallen the most, manufacturing accounts for, on average, 7.5% of all jobs, while in the eight cities with the smallest decline, manufacturing represents 6.1% of total employment.

The bright side to the whole equation is that the manufacturing sector tends to be one of the most cyclical markets. Just as we saw steep declines in employment during the recession, this sector is likely to experience above-average increases in the recovery. It is expected that new industries and new types of jobs are likely to emerge as the economy resumes growth (imagine the rise of L.A. Green Tech corridor).

Cushman + Wakefield deduce that the cities with the greatest potential to expand in the recovery will be those that have a diverse, educated work force that can adapt to new growth areas as they arise.

The report concludes, “Commercial real estate in the US is in much better condition than one would expect given that the nation just experienced the worst recession in 70 years. Relatively low vacancy compared to previous recessions suggests that the industry will also recover more quickly than expected.”

**

https://www.cushwake.com/cwglobal/docviewer/AmericasEconomicPulseMAY2010.pdf?id=c33600033p&repositoryKey=CoreRepository&itemDesc=document&cid=c27400005p&crep=Core&cdesc=binaryPubContent&Country=GLOBAL&Language=EN&just_logged_in=1

http://somaweb.org/lacre/wp/wp-content/uploads/2009/03/amerappar.jpg

http://www.socalgreenrealestateblog.com/wp-content/uploads/2009/01/los-angeles-2.jpg

http://www.socalofficerealestateblog.com/wp-content/newuploads/2010/03/port-of-la.gif

http://www.santamonicapropertyblog.com/wp-content/uploads/2009/05/cleantech-la-aerial.jpg

http://suebellyank.com/wp-content/uploads/2009/08/panoramicviewfromrunyoncanyon.jpg

http://www.latimes.com/includes/soundslides/then_now_city_hall/05a.jpg

http://rst.gsfc.nasa.gov/Sect4/los_angeles_skyline.jpg

http://faizanbaloch.files.wordpress.com/2009/07/downturn-1.jpg

INDUSTRIAL REAL ESTATE SNAPSHOT – MAY 2010

By Jodi Summers

Industrial property owners, it’s time to get a little giddy…the market is coming back. New research from a variety of studies indicates that industrial rents are very likely to increase in many markets in 2011 and even more broadly in 2012.

AMB Property Corp. research shows, following eight quarters of negative net absorption, national industrial availability reached a historic high of 13.9% at the end of the fourth quarter, AND 2009 experienced the worst industrial net absorption on record at a negative 265 million square feet. Encouragingly, this negative trend decelerated over the course of the year, slowing to a negative 38 million square feet in the fourth quarter. Tempering this drop is a halt in new construction, which came in at an all-time low of 71 million square feet in 2009.

“Despite these challenging head winds, our analysis indicates that not only will demand recover, but it has already begun to do so in some submarkets,” observes David Twist, vice president of research for AMB Property Corp. “In fact, we may have reached an inflection point in many coastal markets during the fourth quarter, as demand was flat and availability was unchanged at 12.1%.”

GOTTA LOVE THE BEACH

The renewed strength of the coastal industrial market is confirmed by a new report from Colliers International that notes that industrial occupancy rates for commercial space in and around the Oakland property market appear to have stabilized. Like Los Angeles, Oakland is one of the most active container shipping hubs on the Pacific Ocean and this has far-reaching implications for the industrial market on a long-term basis.

In SoCal, take comfort in knowing that despite the recession, Los Angeles County remains the nation’s largest manufacturing center (based on jobs) and is home to the biggest port complex in the U.S. Since the economic downturn, declining global demand for U.S exports and a steep drop in domestic demand for imported goods led to a sharp slowdown in port activity. SoCal’s manufacturing and logistics industries, both of which are major users of industrial space, suffered as a result. However, as recovery began to take hold in other countries, local trade activity, particularly exports, started to show signs of life in late 2009.

The Los Angeles County Economic Development Corporation notes that the market for industrial property in Los Angeles County has shown remarkable resiliency. In spite of an increase in vacancy rates to 3.3% during the fourth quarter of 2009 from 2.2% at the end of 2008 (and 1.6% a year earlier), the industrial vacancy rate in Los Angeles County remained the lowest in the nation. Orange County’s industrial real estate market fared less well, ending the year with a 6.7% vacancy rate, up from 5.7% a year ago. california shipping ports.

For the record, California maintained its position as the second largest state exporter in the first quarter, with total monthly exports averaging around $10.4 billion. Exports in February were up by +13.7% over the year, the fourth consecutive year-to-year increase.

2-PART RECOVERY

AMB projects that the industrial rental rate recovery while evolve in two phases. First will be the psychological effect between landlords and customers as they anticipate improving fundamentals. “Landlords will subsequently hold firm on rents, while customers will try to lock in longer terms at today’s unsustainably low rates,” Twist relates.

The second phase will be driven by actual improving industrial market fundamentals. As demand gains momentum and availability falls, rents will again rise, eventually requiring new construction.

AMB’s model implies the overall US market would likely see rental rate growth as early as 2011, with equilibrium reached by 2012. So as the US market moves toward 10% availability over the next two years, rents can be expected to reach levels necessary to support new construction. According to AMB data, rents will grow by more than 30% over the next three to four years.

Of course, this implies that the Los Angeles area industrial properties will again grow strong. Remember, our current vacancy rate is at 3.3%, according to the LAEDC – and where is there the space to build large industrial spaces without getting caught in a nightmare of traffic – Perris or Poway? Watch the price of industrial properties climb to new highs in the next decade.

REASONS FOR CONFIDENCE

Indicators show that the demand for industrial real estate, in areas such as production and trade, are clearly rebounding. “The consensus forecast for global trade and production suggests that more than 500 million square feet of demand could be realized globally in the next few years, driving the availability rate to equilibrium levels in 2012,” summarizes Twist.

The reports conclude: improving economic condition should push up industrial rents to levels necessary to support new construction requiring in the coming years. Industrial owners, it’s finally time for a happy dance…

**

http://www.globest.com/news/1635_1635/insider/184343-1.html?sector=industrial

http://www.globest.com/news/1643_1643/sanfrancisco/184514-1.html

http://www.laedc.org/reports/BER-2009-Summary.pdf

http://www.laedc.org/eedge/index.html#7

http://www.garon.ch/nouveau/cargo%20ship%20container%20san%20francisco.jpg

http://sfcitizen.com/blog/wp-content/uploads/2009/06/img_7017-copy.jpg

http://www.aaenvironment.com/Pictures/LongBeachPort1.jpg

http://www.pe.com/imagesdaily/2010/03-20/economy_1_400a.jpg

http://www.santamonicapropertyblog.com/wp-content/uploads/2009/07/warehouse.jpg

http://www.mmifreight.com/Images/warehouseweb.jpg

http://www.aaenvironment.com/Pictures/LongBeachPort3.jpg

LOS ANGELES INDUSTRIAL PROPERTY SNAPSHOT – APRIL 2010

By Jodi Summers

Feel comforted, industrial space in Los Angeles isn’t the only location to take a hit. In 2009, the global recession negatively impacted industrial production and consumer behavior throughout the world, according to a recent report by Cushman & Wakefield. In an unprecedented scenario, global rents tumbled an average of 5.5% worldwide, as demand for space rapidly declined virtually everywhere.

Worldwide, there were some major shifts in lease rates and availability. London Heathrow stayed the most expensive industrial location in the world, followed by Tokyo; Berlin, Paris and Stockholm entered the top 10, while Singapore and Madrid fell off the peak. The Asia Pacific saw the largest fall, with rents decreasing by 6.4%. European rents fell an average of 5% - Central and Eastern Europe saw rents deteriorate by 12.5%, while Western European rental values fell by just 3%. Because of the shortage of quality space, South American rents showed a degree of resilience, falling by just 0.1%. North America rental levels declined by 6.9%, as key industrial locations in both the U.S. and Canada and the USA suffered from reduced demand.

Across the USA, industrial properties suffered because of the economic slowdown and rental levels moved down by 7% over the year. This resulted in increased consolidation

with many tenants releasing space back on to the market, creating a further rise in vacancy rates and additional downward pressure on rents.

Locally, in California, Los Angeles County and Silicon Valley/San Jose were worst affected in the USA in 2009, with rents declining by 19% and 14% respectively. In Los Angeles county, lease rates fell to $6.24 annually.

Fortunately, the future is brighter. The consensus is that economic growth will largely be positive in 2010, resulting in increased demand and rising rents.

Currently, the most expensive location in terms of total occupancy cost is now the Canadian capital city of Ottawa, replacing the San Francisco Peninsula. FYI, Ottawa was also the best performing city in terms of rental growth in the North American region. (The industrial market in Ottawa is small and dominated by distribution and warehouse facilities; therefore it has been less affected by the manufacturing slowdown.)

**

http://iq.eur.cushwake.com/ve/ZZ29313083616869d87dT4

http://www.cnsm.csulb.edu/departments/geology/people/bperry/GrantPhotos/LosAngelesBasin/159JetOverIndustrialAreaMar05L.jpg

http://www.greenberryinc.com/City%20Images/LA,%20Sac,%20Long%20Beach/la_top.jpg

http://www.wired.com/images_blogs/autopia/images/2009/01/13/heathrow.jpg

http://www.greaterottawachamber.com/ottawa/imagecache/main/sites/default/files/Govt%20Int%27l%20Industrial%20Security.jpg

http://www.algosys.com/fichiers/CMP_Logo.jpg

http://img690.imageshack.us/img690/869/slagsteel.jpg

INDUSTRIAL ECOLOGY TERMINOLOGY

Edited by Jodi Summers

Industrial Ecology is one of the finest concepts to come out of the green revolution. It also has some terminology that is uniquely its own…so we looked all the relevant terms up on Wikipedia (thank you http://en.wikipedia.org/) and would now like to share them with you…

Industrial Ecology - Industrial Ecology has been defined as a “systems-based, multidisciplinary discourse that seeks to understand emergent behavior of complex integrated human/natural systems”. The field approaches issues of sustainability by examining problems from multiple perspectives, usually involving aspects of sociology, the environment, economy and technology. The name comes from the idea that we should use the analogy of natural systems as an aid in understanding how to design sustainable industrial systems.

Circular Economy - Circular Economy is an evolving term that emphasizes strategies which a circular flow of materials and energy for environmental and monetary gain. An example of Circular Economy would be selling waste heat from one process to run another process that requires a lower temperature, thus maximizing energy efficiency by circulating emissions from one business to another.

Closed system - A closed system is a system in the “state of being isolated from its surrounding environment.” The term often refers to an idealized system in which closure is perfect. In reality no system can be completely closed; there are only varying degrees of closure.

Isolated system - In the natural sciences an isolated system, as contrasted with an open system, is a physical system that does not interact with its surroundings. It obeys a number of conservation laws: its total energy and mass stay constant. They cannot enter or exit, but can only move around inside.

Open system - Open system (systems theory), a system where matter or energy can flow into and/or out of the system, in contrast to a closed system, where energy can enter or leave but matter may not.

Eco-Industrial Park - An eco-industrial park (EIP) is an industrial park in which businesses cooperate with each other and with the local community in an attempt to reduce waste and pollution, efficiently share resources (such as information, materials, water, energy, infrastructure, and natural resources), and help achieve sustainable development, with the intention of increasing economic gains and improving environmental quality. An EIP may also be planned, designed, and built in such a way that it makes it easier for businesses to co-operate, and that results in a more financially sound, environmentally friendly project for the developer.

**

http://en.wikipedia.org/

http://greeneconomypost.com/retrofitting-industrial-ecology-for-increased-profitability-and-environmental-improvement-7663.htm?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheGreenEconomyPost+%28The+Green+Economy+Post%29

http://www.bsdglobal.com/viewcasestudy.asp?id=77

http://www.enviroscopy.com/uploads/ESYOffer/industrial.s.jpg

http://amassthetruth.com/images/closed-system1.jpg

http://i.treehugger.com/images/2007/10/24/water%20cycle-jj-001.jpg