"We're sensing a palpable level of negative sentiment in thewarehouse leasing market at the present moment," says Ross Moore,senior vice president and director of market & economicresearch at Colliers. "That said, many markets continue to postvery strong fundamentals."

Of the 50 markets Grubb tracks in detail, 32 posted rising Q1vacancy rates, while 18 posted declines. Among large US markets,vacancy was lowest in land-constrained and trade-fueled Los AngelesCounty at 1.6% and highest in Memphis at 16.1%. Markets postingvacancy increases over one percentage point during the quarterincluded California's Inland Empire, Nashville, Las Vegas, OklahomaCity and Phoenix. Only two markets, Sacramento and NorthernIndiana, saw their vacancy rates decline by more than a percentagepoint.

But according to Colliers, despite the rival firm's finding of adecline in Northern Indiana, the Midwest markets in general wereamong the strongest in terms of healthy absorption levels thankslargely to growing export demand for US-made machinery and parts."The export sector remains a bright spot, and going forward, wewill keep vigilant watch on the housing market, retail sales andmarkets linked with the booming commodities sector," saysMoore.