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Industrial Market in 'Respectable' Shape

DENVER-The dark cloud on the horizon is the 15.6% vacancy rate in R&D/flex space, notes Grubb & Ellis, particularly in the Southeast and Northwest submarkets. Also, an uptick in sublease space is cause for concern.

By John Rebchook | Updated on November 27, 2001

DENVER-The Denver-area industrial market in the third quarter held its own, with its overall vacancy rate rising to a ”very respectable” 6.7%, shows a report by Grubb & Ellis. The overall vacancy rate is up by only 1%, the report notes, but warns that the R&D/flex market’s vacancy rate is 15.6% and is ”beginning to exhibit more than just similar building characteristics with the office market.”

“Unlike other property types, the industrial market is weathering the storm because lenders and developers have done an admirable job maintaining the balance between supply and demand,” the Grubb & Ellis report adds.

Much of the R&D/flex space, where the higher vacancies are found, is found in the Southeast and Northwest submarkets. ”Despite the R&D/flex woes (in those submarkets), the dynamics between supply and demand appear to be in balance for the market in general,” Grubb & Ellis notes.

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