The last quarter saw very little space leased, more subleases, and vacancy rates jump to 14.8 percent - above the historical national range. The speculative construction started in the last half of 2007 has yet to be absorbed. Consequently, development in 2008 has been minimal compared to recent history.

Vacancy on properties less than one year old stands at 58 percent and is 73 percent when the speculative 80,000+ square foot buildings in Fort Pierce and Gateway are included in the mix. For context, the 58 percent represents about 219,000 square feet of vacant industrial space that at last year's absorption rates would be leased or sold within a single quarter.

Asking lease rates fell slightly to $.53 per square foot per month for warehouse space. Office/warehouse with large amounts of office space is still being offered at higher rates. Last year at this time, industrial buildings could not be bought for $100 per square foot. This year, they are not selling for $100 per square foot.

Outlook
We do not believe vacancy rates will increase beyond current levels. Nearly all spec industrial projects are finished, and efforts to lease these properties have been one of the contributing reasons for increases in vacancy.

Historically, our vacancy rate has been much better than the national averages. Absorption of existing vacant space will take time, and we expect smaller spaces to move faster than larger ones. In the meantime, look for the industrial sector to recover with the housing sector and national economy.