source: IMF World Economic Outlook 2006

If you’re investing anywhere on Earth, you may wish to take a look at the International Monetary Fund’s World Economic Outlook report , released in mid-April. Of particular interest are the report’s related databases , which allow you to gather comparative economic data and forecasts for any country or global region through 2007. At an April 19, 2006, press conference, Raghu Rajan, economic counselor and director of the research department for the IMF, said, "We have revised global growth for 2006 up by 0.6 percentage points to 4.9 percent. I should remind you that this is the fourth year in a row of about 4 percent growth. Upward revisions for China, Russia, and India account for two thirds of the revisions, but prospects in Japan have also improved noticeably while hope is growing for the Euro Area." He also stated, "Tight domestic labor markets in a number of industrial countries, including the United States and Japan, will also attenuate the effects of global competition on wages."

Complementary data to the above report may be found in the statistical annexes to UNCTAD’s recently released "World Investment Report 2005: Transnational Corporations and the Internationalization of R&D." Greenfield project data for most nations between 2002 and 2004 is presented, most of it drawn from the database of OCO Consulting, headed by Henry Loewendahl.

President George W. Bush tours United Solar Ovonic's football-field long solar cell manufacturing machine on February 20, 2006, in Auburn Hills, Mich. Subhendu Guha, president of United Solar Ovonic, explains the science behind the photovoltaic technology that makes solar panels. photo: United Solar Ovonic

IAMC member firm Whittaker Associates has prepared a list of 47 tips called The Prospect comes to town - preparation, the tour, and follow-up. Principal Dean Whittaker says the list was formulated as the company worked with the Michigan city of Greenville, home of a 2,700-worker Electrolux refrigerator plant that just closed in March 2006, in anticipation of a short-notice visit from Auburn Hills, Mich.-based United Solar Ovonic. Must have worked: On March 22, United Solar Ovonic announced it would open a $129-million, 200-worker plant in Greenville for the manufacture of solar cells, beating out a site in South Carolina.

Looking for a quick logistics read? How about the 40-pp. NAIOP book "Rules of Thumb for Distribution/Warehouse Facilities Design" ? Put together by a team of 13 collaborators from around the country, the book guides readers through issues related to structures of more than 100,000 sq. ft. (sq. m.), including material handling equipment and racking, floors and roofs and clear height. (Another recently published NAIOP title may be of interest to all IAMC members: "How to Calculate the Economic Contribution of Office, Industrial, and Retail Real Estate to the Local Community." )

You may want to calculate voice recognition technology into your warehouse design. So says a report in the March edition of IAMC member company ProLogis’ Supply Chain Review. "Voice Recognition Systems - Technology at Work in Today’s Warehouse/Distribution Facilities" concludes that VR systems are "arguably the most important technological breakthrough in warehouse operations" since the advent of barcode scanning.

If you’re interested in the latest China has to say on intellectual property rights protection, look no further than the April 11 press conference transcript from the office of the U.S. Trade Representative, on the occasion of the U.S.-China Joint Commission on Commerce and Trade annual meeting.

A new report called "Align By Design: How Corporate Real Estate Executives (CREs) are Aligning their Strategy and Operations to Support the Enterprise" is available for download at the Web site of New York-based Alvarez & Marsal Real Estate Advisory Services. Based on interview with corporate real estate executives at 25 organizations as well as with three representatives of national full-service firms, the report finds, among other things, that 76 percent of the participants reported that they use key performance indicators (KPIs). "Although occupancy cost/SF, cost/employee, SF/employee, and vacancy and utilization were the most typical KPIs," a press release stated, "corporates recognize that a lack of standard definitions makes it difficult to compare these metrics across portfolios and industries."

Bob Bach, senior vice president, research & client services, Grubb & Ellis Company, recently delivered his U.S. industrial market outlook. "Even with high levels of construction, there are reasons to expect that rental rates will continue to rise at a slow to moderate pace in many markets," he wrote, among them "rising land prices due to competition with residential and other developers, more difficult entitlement processes, removal of older product for redevelopment, and higher construction costs." Among Bach’s observations at the end of the first quarter:

• The vacancy rate has been falling for eight consecutive quarters, but the rate of decline slowed to just 10 basis points in each of the past two quarters. Vacancy was 8.0 percent at the end of the first quarter of 2006, its lowest level since the third quarter of 2001.
• Eight markets recorded sub-five-percent vacancy rates compared to six at the end of the fourth quarter. Los Angeles County once again recorded the nation’s lowest vacancy rate at just 2.0 percent thanks to torrid, port-related demand combined with limited land availability. Two nearby markets, the Inland Empire and Orange County, also made the list, followed closely by the three South Florida markets of Miami-Dade, Broward and Palm Beach counties. Also on the list is Las Vegas, where land for industrial development has become an endangered species.
• Chicago and Northern and Central New Jersey absorbed 4.5 million and 4.2 million square feet of industrial space, respectively, in the first quarter, leading all other markets. Baltimore and Long Island recorded the sharpest levels of negative absorption.
• Space under construction rose for a ninth consecutive quarter to 109.7 million square feet, a slim 10 percent below the all-time peak recorded in the fourth quarter of 2000. The Inland Empire leads all markets in the construction ledger with 22.9 million square feet in the pipeline, far ahead of second-place Atlanta with 13.6 million square feet underway.
• The average asking rental rate for warehouse/distribution space has bumped up 5.6 percent over the past year, ending the first quarter at $4.56 per square foot per year NNN. Thirty-six of 48 markets posted year-over-year gains, while 29 posted gains above the 3.8 percent rate of inflation from March 2005 to March 2006 as measured by the Labor Department’s Consumer Price Index for All Urban Consumers (CPI-U).

Compare those findings to those contained in the March 28 industrial property market and U.S. construction pipeline reports issued by IAMC member company ProLogis. Among their findings:

The vacancy rate for industrial distribution space was at 8.3 percent at year end 2005 across the top 30 markets, compared to 9.7 percent a year earlier. "Meanwhile, ‘asking rents’ jumped 5 percent, and broader-based market rent increases are likely to occur in 2006 as the supply-demand balance continues to tighten," read the report.

Net absorption totaled a remarkable 167 million square feet during 2005, compared to 114 million square feet in the prior year. That’s the equivalent of a 3.7 percent increase in occupied space.

Speculative building accounted for 76 percent of total starts in 2005, compared with 66 percent in 2004 and 59 percent in 2003.

Grand Chenier, LA, 1-27-06 -- Road repairs are being made to this section of Highway 82 that Hurricane Rita damaged. MARVIN NAUMAN/FEMA photo