The push for tenant-friendly concessions was fueled in the first quarter of the year by an overall Puget Sound vacancy rate of 8.1%. This represents a 20.9% increase over the 6.7% rate for year-end 2001.

Grubb & Ellis says "nationwide economic slump combined with local job cuts in aerospace, technology and manufacturing" are having a negative impact on the demand for distribution/warehouse space in the market.

While negative absorption in the first three months of this year ran about one half million square feet, Grubb & Ellis says the "pace of weakening demand appears to be slowing"—welcome news to industrial landlords.

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