KANSAS CITY—Ever since Ford andGM decided to double down on their commitments tothis metro region, the industrial real estate market has shown tremendousstrength. In the third quarter companies absorbedspace at a pace not seen in years, and the vacancy rates continuedto fall, according to a new study published by CassidyTurley.

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The data show that the industrial market's net absorption was1.83-million-square-feet. The last time it exceeded1.5-million-square-feet was in the third quarter of 2008, whentenants absorbed 2.36-million-square-feet of space. And the strongdemand has caught the attention of developers.

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“So far this year, a total of 3.01-million-square-feet of bulkand modern space has been added to the industrial market, and 77%of that has been speculative,” said Michael Mayer,managing principal in Cassidy Turley's Kansas City office. “By theend of the third quarter, 84% of that newly constructed spacealready had been leased or sold.”

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As reported in GlobeSt.com, in the second quarterthe vacancy rate actually increased, from 7.7% tonearly 8.0%. However, this was the result of developers delivering945,000-square-feet of industrial space, including threespeculative buildings that added 729,000-square-feet to the market.But during the third quarter, “space taken outpaced constructioncompleted, and overall vacancy fell from 7.9% to 7.6% -- very closeto the historical average of 7.7%,” Cassidy Turley found.

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Net absorption for new bulk and modern distribution facilitiestotaled 1.66-million-square-feet during the quarter.Alphabroder, for example, moved into a370,000-square-foot building completed early in the year, whileAmazon.com and Smart Warehousingtook just-completed buildings of 261,000-square-feet and574,000-square-feet, respectively. FlexsteelIndustries also purchased a 500,000-square-footbuilding.

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“With so much activity taking place, the outlook is positive forKansas City's industrial market – it should remain healthy for theremainder of 2014 and most or all of 2015,” the firm said.

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.