"The Northeast Industrial Market gorged itself in the first three quarters of 2000 and then pushed back form the table and enjoyed that fully satiated feeling in the fourth quarter," according to the report. "Net absorption swallowed up space at over 1 million sf per quarter in the first, second and third quarters and experience no new absorption in the fourth quarter."
Quite a bit of space had been leased in the fourth quarter, although it didn't impact absorption, as tenants took over a number of second generation space that became available, so there was no net change. The report predicts "continued strong net absorption for the first three quarters and an increased in new construction" by the end of this year.
For the second quarter in a row, there had been no new construction completed in the fourth quarter. A building that has already opened this year, however, already is 100% leased. The largest contiguous space in a new building covers 104,000 sf, with the next biggest block falling off to 69,000 sf.
The vacancy rate at the end of the year was 4.5%, down substantially from the 8.35% at the end of 1999. In 1995, the NE vacancy rate was only 3.25% for about 35 million sf, but the market has grown substantially since then to nearly 45 million sf. The report predicts "continued strong net absorption for the first three quarters and an increased in new construction" by the end of this year.
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