Daily Camera:

January 2006: The Northwest Industrial Market in 2005 and what’s In Store For 2006

What is in store for our Northwest Industrial Flex / R& D Market & Warehouse market? What will vacancy rates look like and where will lease rates go? Let’s take a quick look back at 2005 and see if we can determine where the trends are headed.

Industrial Flex / R&D vacancy in the Northwest Submarket (including Boulder, Louisville, Lafayette, Broomfield and Longmont) decreased somewhat in 2005. Vacancy rates began the year for Industrial Flex space at approximately 21.5% and finished the year at approximately 19.5% with lease rates staying relatively flat but slowly trending upward from where they began the year. The result of the leasing activity is that vacancy rates finished the year approximately 2% lower from where they started and lease rates were up on average by approximately $.12 per square foot.

Total Flex / R&D Vacancy Rate January 1, 2005 = 21.5%
Total Flex / R&D Vacancy Rate as of December 31, 2005 = 19.5%

The graph below provides a snapshot over the last 3 years of vacancy rates and average triple net lease rates for the Northwest Flex / R&D market:

Industrial Flex / R&D Vacancy and Average Rental Rates

Data and graphs provided by CoStar Realty Information, Inc. Vacancy rates, rental rates, available square feet and the graphs were compiled by utilizing the Costar Realty Information, Inc. database. The information contained herein is for informational purposes only. Gibbons-White, Inc. or Chris Boston makes no representations or warranties with respect to the accuracy of the data or the information contained herein.

Industrial Warehouse vacancy in the Northwest Submarket also decreased somewhat in 2005. Vacancy rates began the year for Industrial Warehouse space at approximately 14.5% and finished the year at approximately 13.25% with lease rates staying relatively flat. The result of the leasing activity is that vacancy rates finished the year approximately 1.25% lower from where they started and lease rates were up on average by approximately $.08 per square foot.

Total Industrial Warehouse Vacancy Rate January 1, 2005 = 14.5%
Total Industrial Warehouse Vacancy Rate as of December 31, 2005 = 13.25%

The graph below provides a snapshot over the last 3 years of vacancy rates and average triple net lease rates for the Northwest Industrial Warehouse market:

Industrial Warehouse Vacancy and Average Rental Rates

Early 2006 indicators see a continuing trend of marginal improvement in 2006 with numerous brokers in the community reporting increased Tenant activity. Obviously, if this continues, vacancy rates will continue to fall pushing lease rates higher.