EL PASO, TX–According to the latest El Paso IndustrialMarketView report from CBRE, the localmarket set a new 13-quarter high, seeing its highest net absorptiontotal since the first quarter of 2011. Total transactions for thequarter were 624,202 square feet, with 341,574 square feet ofpositive absorption. This positive net absorption comes in the wakeof two quarters of negative net absorption.

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CBRE's Christian Perez Giese tells GlobeSt.com,“I am surprised by the dynamics locally for supply of smaller classA space compared to larger class A space. The market for smallerspaces is much tighter than for larger spaces.”

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As with most Texas markets, class A space isseeing the highest level of demand. For class A space under 100,000square feet, the vacancy rate fell to 2.8% this quarter.

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The area is already being stimulated by the early delivery ofthe new Union Pacific intermodal facility. The$400 million project came online a year earlier thanscheduled.

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Even with the low class A vacancy rate and the increasedactivity around the intermodal facility, the report points out thatlarge blocks of available space has continued to temper progressiveactivity. According to the report, large blocks of vacant spaceover 200,000 square feet compose eight of the current 149 availableproperties, but these few properties account for 31% of all vacantspace.

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Adding to this block of space is the contraction of 105,000square feet by Johnson Controls, which entered themarket during the second quarter.

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Still, Giese feels the market will continue to strengthen in theyear ahead. “The El Paso industrial market will be much tighter,with several large transactions absorbing part of the bulkvacancy,” Giese says.

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