The majority of the absorption can be attributed to businessexpansion within San Diego County, along with some new and startupbusinesses coming in, according to Voit. The industrial market hasperformed well through the first three quarters of 2000 and shouldcontinue to do so into next year, according to the brokerage.

With a third-quarter 2000 vacancy factor of 6.36%, industrialprices for both leases and sale properties should rise 5% to 7%over the next year according to Voit. The current average askinglease rate for industrial product in San Diego County is 60 centsper sf, triple net.

"We are also witnessing vacancy rates beginning to decline,while leasing activity is increasing. Currently, there is over onemillion sf of new product under construction, with another 1.55million sf on the slate or being planned," the report states.