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DENVER-A Grubb & Ellis Co. update on the industrial market poses the question whether 2001 is a space Odyssey?

The report notes that 1999 ended with a vacancy rate of 8.35%, which was halved to 4.28% at the end of 2000, despite about 2.8 million new sf coming in line in the 44.98 million sf market at that time. Since then, about another 1.5 million sf has been added. At the end of the third quarter of this year, the vacancy rate in the largest industrial market in the Denver area has risen to 6.2%, still below 1999 levels but higher than last year.

“2001 feels like we have been in slow motion, but perhaps it is just a hangover from the hyper-market of 2000,” notes the report. “We anticipate yearend 2001 to reflect 1.7 million sf of new construction, almost 800,000 sf of net absorption and a year-end vacancy rate of 6.3%. By all measures, a good year.”

But the report notes the aftermath of the terrorist attacks on Sept. 11 negatively impacted the economy and the industrial market. “Activity has slowed, we are seeing some downward pressure on rates and new construction has been scaled back,” researchers conclude. “2001 will be viewed as a good year for the northeast industrial market. The real challenge may be in 2002, a real space Odyssey.

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