For the year, positive net absorption hit 1.8 million sf. It wasa major shift from the soft demand in 2003. The biggest jump inactivity came in R&D/flex space, which experienced 600,000 sfof net absorption this year. That was in "contrast to the extremelyweak demand seen after the tech wreck a few years ago," accordingto the Grubb & Ellis report.As for the coming year, early newshas more positive growth in store for the metro area industrialmarket, although vacancies are expected to climb from 7.6% atyear-end 2004 to 8.3% during 2005, due to 2.7 million sf of producthitting the market. Preleasing has been brisk, with 1.1 million sffilling up.As for the submarkets, look for rents to remainrelatively flat, with tenant concessions, such as free rent andincreased tenant improvement dollars, continuing in 2005. But themid-county region is getting tighter and tighter, according toBurnham senior vice president Mickey Morera. "Vacancy in Miramarstands at just 5.4% and in Kearny Mesa is just 3.2%." Morera saysthat with "virtually no existing warehouse space left in themarket, expect to see the redevelopment of older industrial spacein the more mature submarkets of Miramar and Kearny Mesa."Amongtrends in 2005: demand for defense, communications and biotech willbe strong, according to the Grubb & Ellis report. Biotechparticularly will look for strong employment growth. ThePharmaceutical Research and Manufacturers of America (PHRMA) hasthe biotech industry growing nationwide by 11%, or 130,000 workersin coming years. With San Diego ranking third nationally in biotechemployment, those numbers bode well for the local economy. Alreadyon tap are build-to-suits for Biosite and GenProbe that will hitthe market in 2005.Another project to come on line is the CarlsbadRaceway Business Park, a massive mixed-use project that will add1.5 million sf of office and industrial space at build-out. Theproject will be built on 147.1 acres and is set for multiple phasesover several years. The tentative map, which includes a combinationof speculative industrial/R&D product, owner-user lot sales andbuild-to-suits for lease or sale, received unanimous approval fromthe City of Carlsbad. Officials with HG Fenton Co., the project'smaster planner, are to begin grading on the project, according toKevin Hill, vice president of leasing with HG Fenton.