Northeast-Sector Industrial Market Remains Strong

DENVER-The northeast industrial market report by Grubb & Ellis industrial brokers Murray Platt, Doug Viseur and Todd Witty puts the market into perspective by comparing it with the office market. When that’s done, the industrial sector shines.

“The Denver real estate market has become a vast wilderness,” the report begins. ”The northwest office market and the southeast office market — office/flex markets — are both accelerating toward 30% to 40% vacancies.”

Not so with the northeast industrial market, which boasts a 5.91% vacancy rate at the end of the second quarter, compared with 5.2% a year earlier, despite 536,393 sf of new construction.

”The lone bright light seems to be the northeast industrial market,” says the report.

Class A industrial space boasts 633,165 sf of net absorption in the second quarter, and is on target for 1.3 million sf of absorption this year.

”The vacancy rate for class A space dropped to 7.9%, the lowest ever,” the report crows.

However, that is tempered somewhat by the negative absorption of 448,298 sf in class B and class C space, non-class A space vacancy rate rose to 5.43%.

There also is an increase in subleased industrial space available, which rose 824,780 sf.

The report sums up the market this way: ”The future of the northeast market remains bright and will get brighter as the rest of the market experiences flickering flames or rolling blackouts.”