The Valley's 252-building, 31.2-million-sf distribution sector saw 955,489-sf of positive absorption, dropping the overall vacancy rate from 15.47% at the end of the second quarter to 12.47% as of the end of September. The Valley's 3.9 million sf of availability includes 1.27 million sf of sublease space.
Much of the positive absorption in the distribution sector can be attributed to Maytag, Whirlpool and Best Buy combining to lease 654,530-sf of former Webvan warehouse space in Kent that is owned by AMB Property Corp. Colliers says the monthly rent they will pay is less than $0.30 cents per sf, well below the 41 cents per square foot Webvan was paying just two years ago.
Positive absorption also occurred in the Valley's high-tech flex sector, which contains 83 buildings and 4.6 million sf. The sector saw 115,494-sf of positive absorption, dropping the overall vacancy rate from 18.56% at the end of June to 16.74% at the end of September.
The worst Valley performer was the 20-million-sf business park sector, which sustained 315,000-sf of negative absorption, worse than the previous two quarters combined, according to Colliers. As a result, overall vacancy rose from 8.36% at the end of the second quarter to 9.85% at the end of September.
The Valley's 16.8-million-sf manufacturing sector saw nearly 270,000-sf of negative absorption, leaving 1.2 million sf of space available, which translates to a 9.54% overall vacancy rate, up from 7.96% at the end of the second quarter. About 25% of the region's 1.6-million-sf of available space is on the sublease market.
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