YTD absorption, in the meantime, recorded a slight increase from 853,252 sf during Q3 2004 to 973,274 sf at the end of Q3 2005. The report points out that although the state's unemployment rate has decreased 0.3%, and is now at 6.7%, the metro area's unemployment is higher than the national average of 4.9% recorded between May and August 2005. Much of the high unemployment is due to the grim business news of 2005, which has included mass consolidations and reorganizations, not to mention firms such as Delphi, Northwest Airlines, Collins & Aikman and Loan Giant, all of whom filed for bankruptcy protection. Added to that, the auto industry still feels the effects of globalization, which has led to cutbacks and layoffs.
Rental rates haven't budged much either--the overall average of $20.49 per sf during Q3 2005 hasn't shifted from the Q2 2005 figure. Predictions are for continued decreases in face rates through 2006, with the possibility of increased concession packages, though concessions nationally are on the decline.
On the construction end, not a whole lot was delivered, either--with 147,270 sf of new product coming online, bringing the YTD total to 776,449 sf. Though an additional 1.38 million sf is under construction, experts don't see the year-end 2005 figure reaching 2004's 1.27 million sf, as most of what is currently in the pipeline won't come online much before 2006.
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