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Industrial Demand to Increase

Here’s some good news for industrial landlords. Business capital spending is approaching the previous record set four and a half years ago at the peak of the technology bubble. New orders for non-defense capital goods excluding aircraft, a proxy for business capital spending, totaled $67.2 billion (seasonally adjusted) in January, just shy of the $68.6 billion recorded in June 2000.

Business capital spending increases the volume of goods flowing through corporate supply chains, which translates into higher demand for warehouse-distribution space, says Bob Bach, national director of market analysis at Grubb & Ellis.

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