The report concludes that the "stellar performance experienced early in 2001 was hampered by a slow fourth quarter." Vacancies rose to 7.91% in the fourth quarter from 7.15% in the third quarter. The spike, say researchers, is directly tied to more than two million sf delivering in the fourth reporting period.

Industrial net absorption fell from 1.1 million sf in the third quarter to a negative 456,229 sf in the fourth quarter. Tenant move-outs and that new space are blamed for the setback. The city's bright spot is the southwest submarket, which posted a positive net absorption of 123,615 sf amidst a sea of negative postings. The northwest submarket also had positive absorption, 18,591 sf, as did the CBD with 12,839 sf. Negative absorption was recorded in the south submarket, 314,912 sf while the north was down 175,165 sfand the northeast back 101,162 sf.

Rental rates stayed flat over the fourth quarter, averaging 45 cents per sf. Researchers say increases took place for certain property types, including warehouse, positioned in the CBD and flex space and manufacturing facilities in the northwest, north and south.

Fourth quarter construction had three million sf under way in comparison to 4.4 million sf in the third quarter. Most experts expect that number to steadily decrease until absorption picks up.