It also fell from 5.6% at the end of the fourth quarter of 2002. Indeed, in the past six quarters, the industrial vacancy rate has fallen from 7.2% in the fourth quarter of 2001.

"Total available square footage decreased even more dramatically," CB reports. "A million square feet of available space was absorbed into the market during the first quarter, dropping Denver's availability rate to 6.8% from 7.4% last quarter, a 19% (percentage rate) decrease."

That is much better than the nation as a whole, which had an average availability rate in the fourth quarter 2002 was 11.5%, according to the latest national figures available from CB.

During the first quarter, there was 1.6 million sf of gross leasing activity, which was 46% less than the 2.9 sf leased in the fourth quarter.However, the first quarter still recorded 660,000 sf of positive net absorption, compared to 800,000 sf of positive net absorption in the fourth quarter, only an 18% drop.

One reason that the market is doing so well is because there is little new construction under way."Whether exercised as an act of prudent market savvy, or cautious hesitation due to uncertainty, the reduced levels of construction activity have allowed Denver's industrial market to maintain positive net absorption during a period of reduced tenant activity," CB Richard Ellis report.

More than 550,000 sf, or 85%, of the 640,000 sf under construction in the first quarter was in the Airport/Montbello area.However, despite relatively little construction activity and strong leasing and absorption, the average asking rate has been trending downwards.But as the market approaches equilibrium between supply and demand, rates are expected to stabilize, according to the report.