In the second quarter, the vacancy rate had stood at 5.82%.Another highlight is that for three straight quarters, the markethas absorbed more than one million sf, with the first nine monthsthis year pushing the rate to more than 3.4 million sf. Most of thenet absorption has occurred in class B and C space, an older,second-tier space that now has a 2.3% vacancy.

The third quarter marks the first in five years that no newclass-A buildings had come to market. That will change in thefourth quarter when 700,000 sf of class-A industrial space willdeliver.

Also noteworthy is Catellus is bringing back on line 349,000 sfnear the former Stapleton International Airport, space formerlyoccupied by Web Van. Meanwhile, Janus Capital is subleasing its80,000-sf building in the Prologis Upland Distribution Centerrather than occupy it for its operations.