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DENVER-Trammell Crow Co., in its Northeast Industrial Market report for the third quarter, says two significant events impacted the market. The first is the demolition of the 512,000-sf Samsonite assembly plant along Interstate 70, between Stapleton and the Denver International Airport. The second seminal event is the delivery of 670,000 sf of new construction.

The razing of the assembly plant removed 500,000 sf from the base and resulted in 250,000 sf of negative net absorption in the quarter, Trammell Crow notes. And the 670,000 sf of new buildings in the third quarter led to a 0.75% vacancy rate increase to end the quarter at 11.41%. A year ago, it was at 10.76%. For comparison, at the end of 2002 the overall vacancy rate stood at 9.38%.

Since 2002, the Northeast industrial market, the largest and most important in the metro area, has added about four million sf. The total market now has 51.3 million sf, while it had 47.1 million sf in 2002. Currently, 5.9 million sf is vacant. The class A multitenant vacancy increased to 20.84%, up from 17.75% in the second quarter.

“While this is not great news, we expect the vacancy rate to drop over the next several quarters,” states Trammell Crow, whose industrial team includes Murray Platt, Doug Viseur, Paul Kluck, Todd Wittty and Mark Dwyer. “There is currently no speculative space under construction in the Northeast market, with only one speculative building to be delivered in the next 12 months.”

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