The rate was 2.24%, up only 0.58% from the fourth quarter of 2000. The result reflects a solid warehouse and distribution market and a harder hit office-R&D sector.
There was a mere 228,246 sf of vacant industrial sublease space on the market and an additional 200,739 sf of occupied sublease space being marketed as available, according to the report. In the R&D market, relatively huge amounts of occupied spaces are being offered for lease or sublease as businesses continue to make consolidation plans.
Industrial leasing activity slowed to 746,877 sf in the first quarter of the year compared to the 1.33 million sf total in the last quarter of 2000. The slowing of demand led to a negative net absorption only slightly lower than the highest figure recorded in the first quarter of 1993. That year was also the last time industrial net absorption was negative for the entire year.
The larger submarkets, namely San Jose and Fremont, showed the greatest levels of gross absorption for industrial space, according to the report. Fremont led all the Silicon Valley cities with an 80,202 sf negative net absorption rate.
Despite negative net absorption rates, industrial spaces are weathering the current slowdown better than the higher-end office and research/development and the industrial market swings are likely to remain on a much smaller arc than the other more volatile office/R&D markets.
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