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HOUSTON-In a third quarter “Big Box” report, a CB Richard Ellis Houston team questions whether it’s time to “expand the farm” in the city’s bustling northwest industrial submarket.

Billy Gold, first vice president and Jeff Everist, vice president, answer: “If the absorption trends continue, we can surmise we have approximately two to three years’ worth of inventory on the ground and an additional one to two years’ worth of inventory proposed.” Next generation space, they say, will have higher clear heights, ESFR sprinkler systems, longer truck aprons and superflat floors–definitely the product of choice.

The quarterly report pegs absorption levels at 1,616,007 sf of leasing activity in 41 transactions. For the same period in 2000, 817,893 sf was absorbed via 14 transactions. The team warns, however, that “for the third straight quarter the amount of square feet leased has declined and the size of the transactions are smaller.” Still, the report predicts year-end totals will come in near the two million-sf mark, a 28% increase over last year’s grand tally.

Gold tells GlobeSt.com that all factors considered, future projects will likely have stiffer risk assessment criteria. Developers will have to anticipate longer lease-up times. And, he says, the risk assessment will get even tougher scrutiny because a lot of the prime tracts in the area already have been developed. Without a doubt, the northwest market is facing some tough issues right now: the uncertain political and economic times, Hewlett Packard’s takeover of Compaq and the amount of inventory. Still, says Gold, there will always be a demand for northwest industrial space and the market will continue to bustle.

“Only time will tell if the Houston market will be a beneficiary or victim of the potential (Compaq) merger,” says the team’s report. “Although in the short term we may see a decrease in warehousing requirements, we believe that Houston’s low cost of doing business will benefit us in the future.

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