That's the word from an analysis of Denver's industrial market by Marcus & Millichap. Instead of a bust, Denver's industrial market is going through an "orderly correction," according to Marcus & Millichap.
"Denver's economy is much more diversified among the service, tourism, domestic trade, high-technology, aerospace and government sectors than ever before, providingsupport for industrial demand despite weak employment," according to the report.
It notes that the local industrial vacancy rate has stayed below 9%, and new construction dropped to less than 2 million sf from 4 million sf in 1998.
"Construction will drop to around 1 million sf per year over the next two years," the report notes.The report predicts completions will remain low and absorption will grow over the next24 months.
"The rebounding economy and developer restraint will help return the market to 7% vacancy by the end of 2004," the report notes. And after dipping 6% in 2002,asking rents will begin to steadily increase, with gains of 1.2% and 4% expected in 2003 and2004,respectively, Marcus & Millichap forecasts.
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