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PHILADELPHIA-The Lehigh Valley industrial market, which grew by 30% since 1998, seems poised for a comeback, according to second-quarter data from the locally based office of Cushman & Wakefield of Pennsylvania. Overall vacancy dropped a bit, to 13.5% versus the 14%-level that had held through this year’s opening quarter.

While that’s a far cry from the low of 6.1% vacancy in the valley in 2000, it combines with other good news. Net absorption year-to-date was up by 1,366,864 sf, according to C&W. That represents a dramatic improvement over steady negative absorption in 2002.

Furthermore, leasing activity this year “is nearly three times higher than last year at this time,” according to the report. It rose to 1,706,184 sf compared to 665,174 sf in mid-year 2002.

Having placed lease expirations, space expansion and space consolidation on hold in past quarters due to a weak economy, say C&W researchers, “many businesses recently found themselves forced to make decisions in an effort to maximize their bottom line.”

Asking rents continued to fall and finished second-quarter at an average of $4.25 per sf. While there are now almost two million sf of proposed industrial buildings in the Lehigh Valley, there are no spec projects under construction. C&W forecasts that at least one million sf of new construction will be completed within the next two years.

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