SEATTLE-Expect industrial vacancies will remain high into 2003 and return to healthier levels only when the economy improves, according to the latest market report by Grubb & Ellis.

The commercial real estate brokerage says regionwide vacancy fell by one tenth of one percent in the third quarter thanks to 697,760-sf of positive absorption. The vacancy rate is now 7.9%, according to the report, which equates to just over 10 million sf available.

“Expect vacancies to remain high into 2003 and only when the economy improves will the industrial market return to healthier levels,” states the report. “Until then, credit tenants can take advantage of low rents and concessions.”

The report says tenants currently looking for space are seeing free rent on longer term deals and asking rates have dropped with effective rents “as institutional owners get more aggressive with rates in order to attract tenants.”

The submarket with the worst vacancy rate was Pierce County, which does not include the City of Tacoma. The 8.5-million-sf market posted a vacancy rate of more than 17% during the third quarter, according to the report. The 2.4-million-sf Tacoma market posted an 11.2% vacancy rate, the fourth highest rate among 17 submarkets. Other submarkets with double-digit vacancies include the I-90 Corridor (12.1%), Bothell/Canyon Park (11.6%) and Kirkland (11%).

The 9.7-million-sf Tukwila submarket posted a vacancy rate of 4.5%, the lowest vacancy rate of the quarter. The 14.4-million-sf Renton market and the 3.9-million-sf Woodinville markets also came in under 5%, while Auburn and Bellevue came in under 6%, according to the report.

About 605,500 sf of industrial space was delivered during the third quarter and another 800,000 sf was under construction. Another 10 million sf is planned but not yet under construction, according to the report.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper


GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.