Although rents and construction didn't increase as much as anticipated, the industrial real estate market was marked by steady demand in the fourth quarter of 2006, according to a report by Colliers International, a Boston-based real estate services firm.

"Vacancy levels are unlikely to retreat, and have largely hit bottom for this cycle – but we don't expect a major increase anytime soon," says Ross Moore, senior vice president and director of market and economic research at Colliers. "That said, for both investors and tenants, market fundamentals look promising into the foreseeable future."

Just a handful of markets are forecasting demand to drop during the first quarter, with the vast majority anticipating leasing markets to remain robust, the report says.

Here are the top 10 industrial warehouse markets and percentages of increase in rents from December 2005 to December 2006.

1. West Palm Beach, Fla., 20.7 percent
2. Oakland, Calif., 19.4 percent
3. Boise, Idaho, 19.4 percent
4. Tampa, Fla., 16.9 percent
5. Orange County, Calif., 16.7 percent
6. Reno, Nev., 16.6 percent
7. Houston, Texas, 15.9 percent
8. Seattle, Wash., 13.6 percent
9. Denver, Colo., 13.3 percent
10. Raleigh, N.C., 13.3 percent

— REALTOR® Magazine Online