"We approach 2001 with cautious optimism in the Portland metroarea as the Oregon high-technology sector predicts robust growth inthe coming years," concludes the report. "However, most economistsagree that the rapid expansion of the last several years is slowingdown and leading economic indicators seem to confirm this."

If land and labor continue to provide viable opportunities, thetrend toward low vacancy rates and new development will continue.Industrial vacancy rates are at their lowest level since 1995. Thevacancy rate in warehouse and manufacturing space dropped four fullpoints in 2000, net absorption posted an all-time high of more thanfive million sf, and rental rates were up.

Rental rates in all product types should continue to increase,according to Grubb & Ellis. Current average warehouse rents fornew construction are pushing 35 cents per sf per NNN. "Class A flexin the Sunset Corridor gave class A office a run for its money withasking rental rates jumping to $1.10 per sf per NNN to $1.15 per sfper NNN, four per thousand parking ratios and $20 per sf to $25 persf tenant improvement allowance," states the report.