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PORTLAND-The city’s industrial market is expected to rebound with moderate force in 2004, with vacancy rates in the manufacturing and warehouse sectors dipping into single digits as demand for consumer goods increase.

“Market fundamentals are improving in a variety of sectors and I expect considerable improvement in the industrial and technology sectors as we move through 2004,” Brad Fletcher, executive vice president, managing director and head of the industrial division for Grubb & Ellis Co.’s Portland office, tells GlobeSt.com. “Short of any new domestic or international surprises, watch for 2004 to mark a return to stabilization in Portland’s industrial real estate market.”

According to a Grubb & Ellis forecast report, 2004 will be a year of optimism for industrial real estate as an improved economy fuels demand for properties. “We’re cautiously optimistic that we’re on the mend and perhaps oriented towards a more sustainable growth pattern, ” Fletcher says.

But not all sectors of the industrial market will see a quick rebound, the forecast study shows. While industrial real estate will remain a much sought after commodity, research and development and flex are expected to remain stagnant as vacancy rates continue to remain elevated in the 14% range, about three percentage points above 2003′s across-the-board end of 11.2%.

Improvements in the national economy, however, will drive tenants and users to take advantage of the market’s opportunities to move into higher class properties, helping building owners with state-of-the-art facilities to quickly lease up their buildings. Developers or landlords who give tenants the option to buy will have a leg up on the competition as users move to take advantage of low interest rates and market conditions to move into ownership, the report states.

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