A new Grubb & Ellis Co. analysis shows net absorption and new construction in 2001 and 2002 will slow down while average rents for research and development/flex space and warehouse/distribution will rise about 3.25% this year. But the overall industrial sector will continue to be a runaway engine, Grubb's industrial specialist Michael Shelton tells GlobeSt.com.

"The wave of telecommunication development, which began to take shape in first-tier cities, is now in full swing across metro Orlando," Shelton says. Over 500,000 sf of telecom hotel space is under way or has recently opened. But new construction isn't going to set any records this year or next, Shelton says.

For example, net absorption of 2.76 million sf is expected to drop to 2.1 million sf in 2001 and 1.8 million sf in 2002. Likewise, new completions of 3.8 million sf last year are projected to slip to 2.2 million sf this year and 2 million sf next year. But that slippage is expected to stabilize the whole sector as newly-completed and existing space begins to fill and vacancies drop.