"Unlike other property types, the industrial market is weathering the storm because lenders and developers have done an admirable job maintaining the balance between supply and demand,'' the Grubb & Ellis report adds.

Much of the R&D/flex space, where the higher vacancies are found, is found in the Southeast and Northwest submarkets. ''Despite the R&D/flex woes (in those submarkets), the dynamics between supply and demand appear to be in balance for the market in general,'' Grubb & Ellis notes.

However, it warns that the rise in sublease industrial space is a cause for concern.

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