Industrial properties, as with much commercial real estate, have been riding a roller coaster and the first quarter for 2012 proved to be a dip. We saw more industrial space vacate than absorb as an unexpected number of large tenants either left the Reno/Sparks area or downsized their operations. Vacancy for the quarter increased from 14.6% to 15.3%. Due to the last three quarters of 2011 having shown strong activity in the industrial real estate market, this led to the general expectation for the same in 2012.
We anticipated new activity to outpace closures thus increasing net absorption and possibly leading to upward pressure on Class A rents. Given increasing talk of national economic recovery, the first quarter proved to be a step back for industrial properties, but gauging from current activity, we are still confident our end of year numbers will match our predictions.
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