"We approach 2001 with cautious optimism in the Portland metro area as the Oregon high-technology sector predicts robust growth in the coming years," concludes the report. "However, most economists agree that the rapid expansion of the last several years is slowing down and leading economic indicators seem to confirm this."

If land and labor continue to provide viable opportunities, the trend toward low vacancy rates and new development will continue. Industrial vacancy rates are at their lowest level since 1995. The vacancy rate in warehouse and manufacturing space dropped four full points in 2000, net absorption posted an all-time high of more than five million sf, and rental rates were up.

Rental rates in all product types should continue to increase, according to Grubb & Ellis. Current average warehouse rents for new construction are pushing 35 cents per sf per NNN. "Class A flex in the Sunset Corridor gave class A office a run for its money with asking rental rates jumping to $1.10 per sf per NNN to $1.15 per sf per NNN, four per thousand parking ratios and $20 per sf to $25 per sf tenant improvement allowance," states the report.

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