Industrial Market Still Tale of Two Products

SEATTLE-The local industrial market showed overall improvement in the fourth quarter but remains a tale of two product types, with warehouse and distribution space making solid gains while the much smaller R&D/flex market continues to struggle, according to the latest report from the Seattle office of Grubb & Ellis.

There is about 148.8 million sf of industrial space in the region, with about 86% of it being warehouse and distribution space and the remainder being R&D/flex space. In the fourth quarter, warehouse and distribution space saw more than 540,000 sf of positive net absorption, dropping the year-end vacancy rate to 8.9%. For the year, net absorption in the warehouse and distribution market was a positive 1.5 million sf, according to the report.

The R&D/flex market, meanwhile, posted about 100,000 sf of positive net absorption in the fourth quarter, but for the year net absorption was still negative to the tune of 162,000 sf. Year-end vacancy in the R&D/flex market was 15.3%, according to the report.