Specifically, the report predicts that after three years to the contrary, the metro region will gain jobs and, thereby, absorb retail space. On the jobs front, the prediction is for growth of 1.3%. Professional and business services will lead the way in overall growth, according to the report, but the most encouraging news is the return of the manufacturing industry, which is expected to see growth of 1%.

On the retail front, although completions are expected to reach 1.2 million sf in 2004, absorption is forecast to outpace new supply, in part due to a significant share of the single-tenant space coming online being large build-to-suit buildings such as grocery stores and discount retailers. As a result, the overall vacancy rate will decline from its current rate of 7% to 6.2% by the end of 2004, according to the report. Concurrently, the completion of high-end retail centers this year will push the average rent up by 0.7%, to $18.78 per sf, according to the report.

The projected growth and the promise of more will keep sales prices relatively stable and cap rates dropping, according to the report. Cap rates are expected to dip into the low 8% range on the strength of higher-quality projects in Vancouver and other suburban submarkets selling at below-average cap rates.