The Phoenix research team predicts the vacancy rate willcontinue to hover in the 10% to 12% range. According to the report,construction completions thus far this year added more than fourmillion sf. Absorption is standing at nearly 8.6 million sf for theyear.

Steve McKendry, DAUM's executive vice president and branchmanager, believes the market will "be able to absorb the majorityof this new space," based on the pipeline through the year's end.According to DAUM, there are 35 buildings, totaling 1.6 million sf,under construction. The average rent posted in the second quarterwas 49 cents per sf triple net.

The Scottsdale industrial market is the region rent gainer,according to the report. It posted an average asking rate of 84cents per sf for standard industrial space.

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