Q3 Industrial Report Confirms Stability Amid Chaos

PORTLAND-The Industrial vacancy rate ended the third quarter at 7.8%, one-tenth of a percentage point lower than it started the year, according to the latest report from the Portland office of the commercial brokerage firm Grubb & Ellis. Net absorption has also remained consistent throughout the year, with net absorption levels averaging around 500,000 square feet per quarter.

The one trouble spot in the market is the industrial flex market in the tech-heavy Sunset Corridor. But the overall stability amid the economic skid is attributable to developers using a less risky strategy in recent years, focusing on build-to-suit projects as opposed to speculative ones, concludes the report. “In short, the construction pipeline empties faster,” states the report. “Couple this quickly moving pipeline with almost non-existent speculative warehouse construction and industrial vacancy should continue to hold throughout the remainder of the year, if not the entirety of the economic slowdown.”

Between now and then, Grubb & Ellis is predicting “continued reservation on the part of companies when it comes to making decisions about capital expenditures, at least until the picture is clearer as to how badly the events of September 11th impacted our already slowing economy.”