The metro's rate is now riding at 7.2%, up from 6.3% at the start of the second quarter. During the quarter, the Valley experienced negative net absorption of 1.86 million sf. "I'm definitely seeing a slowdown in activity and absorption," Pete Klees, an industrial broker with Grubb & Ellis, tells GlobeSt.com "It's been slow all year, but was more accentuated in the second quarter."

Companies are reticent to expand or open new industrial sites during a time when the national economy is in a fragile state. Most tenants plan to wait until there are signs that the economy has turned around before they consider leasing more space, Kleessays. "That's what I'm hearing time and time again," he says.

The slowdown in lease activity has occurred fairly evenly across all submarkets in the Valley, Klees says, although some have been hit harder than others have. "There is negative absorption in some and positive in some and it's washing out to not a whole lot of pluses," he says.