Brian Dennehy is a Kent Valley industrial specialist with the Seattle office of Grubb & Ellis. He tells GlobeSt.com, "It seems we're in a lull all the way around. A lot of tenants are taking advantage of the tremendous renewal rates that are available, and we're just not seeing many tenants looking out in the market."

There were a couple of sizeable transactions (leases) in the first quarter," says Dennehy, "but they were in existing buildings. It's safe to say that right now tenants are going to get better deals renewing where they are or going with existing facilities than they will with new construction."

Because of the preleasing numbers required by lenders, the majority of projects are moving no further than the entitlement process. "Most everything that is planned is waiting for tenants," says Dennehy. "There are some developers that are going as far as the grading and fill for their projects, but they're waiting for tenants to be signed before putting up the walls." According to the Grubb & Ellis report, only 28% of the more than 8.5 million sf of new projects has been signed for by tenants, leaving over six million sf of space unclaimed.