AMB Property Corporation has developed the AMB Industrial Absorption Indicator ("IAI") to forecast industrial real estate demand (net absorption) six months into the future. AMB, a public REIT, acquires industrial property in "gateway and hub markets." Based upon the latest IAI reading (Aug 18, 2003), AMB believes that the industrial market "could show significant improvement in 1Q2004" after six straight quarters of negative net absorption. That's good news for our economy.

Recently Dave Twist, AMB's VP of Research, told me that changes in the level of manufacturing output are highly correlated with changes in demand six months in the future. So one of the key components of the index is the NAPM Purchasing Managers Index, which is currently increasing. You'll get the full scoop at FreeLunch.com.

Twist says that historically the IAI has predicted market movement correctly about 80% of the time. "It seems to call the corners right, but tends to overestimate the magnitude of change." AMB compares its estimates with the historical numbers on absorption from Torto Wheaton. ... So how do you predict the market? What sources do you use to forecast rents as part of your investment and lease analyses?

Spread the Word... If you would like to sponsor the Dispatch (next availability in late October) or advertise an Executive Search, please send e-mail or call me at 415-485-6700.

--Peter Pike