The commercial real estate brokerage says regionwide vacancy fell by one tenth of one percent in the third quarter thanks to 697,760-sf of positive absorption. The vacancy rate is now 7.9%, according to the report, which equates to just over 10 million sf available.
"Expect vacancies to remain high into 2003 and only when the economy improves will the industrial market return to healthier levels," states the report. "Until then, credit tenants can take advantage of low rents and concessions."
The report says tenants currently looking for space are seeing free rent on longer term deals and asking rates have dropped with effective rents "as institutional owners get more aggressive with rates in order to attract tenants."
The submarket with the worst vacancy rate was Pierce County, which does not include the City of Tacoma. The 8.5-million-sf market posted a vacancy rate of more than 17% during the third quarter, according to the report. The 2.4-million-sf Tacoma market posted an 11.2% vacancy rate, the fourth highest rate among 17 submarkets. Other submarkets with double-digit vacancies include the I-90 Corridor (12.1%), Bothell/Canyon Park (11.6%) and Kirkland (11%).
The 9.7-million-sf Tukwila submarket posted a vacancy rate of 4.5%, the lowest vacancy rate of the quarter. The 14.4-million-sf Renton market and the 3.9-million-sf Woodinville markets also came in under 5%, while Auburn and Bellevue came in under 6%, according to the report.
About 605,500 sf of industrial space was delivered during the third quarter and another 800,000 sf was under construction. Another 10 million sf is planned but not yet under construction, according to the report.
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