Despite a large loss in the amount of existing square footage, Knoxville’s industrial property market showed progress and promise as the vacancy rate dropped from 13 percent in 2005 to 11.1 percent in 2007.

While the local vacancy declines, national rates increased from 9.7 percent in 2006 to 10.2 percent in 2007. On a regional level, Knoxville registered the third highest vacancy rate behind Jacksonville at 11.2 percent and Atlanta at 19.2 percent.

Since 2005, the county gained five new buildings totaling 236,100 square feet. Three of these new buildings, National Partitions, Tennessee Steel Center and 84 Lumber Truss, are manufacturing facilities totaling 196,100 square feet.

However, this gain was largely overshadowed by the six buildings that were removed from the inventory totaling 1,236,634 square feet. The most notable loss was the demolition of the former Fulton Plant located at 2318 Kingston Pike. The former Knitting Mill and the former JFG/Reily Foods building are scheduled for commercial and residential renovation while three warehouse buildings along Jackson Avenue totaling 150,000 square feet were lost to a fire.

Of Knoxville’s 13 industrial property sub-markets, East Knoxville boasts the largest amount of industrial space with 4.7 million square feet or 15 percent of the entire local inventory, while claiming a vacancy rate of 12.6 percent. The lowest vacancies were found in Halls/Beverly Road with 0.0 percent, Powell/Northwest with 1.4 percent and North Pellissippi/WestBridge with 3.4 percent.

The outlook continues to look promising for 2008 with Sysco Corp., the largest food service marketer and distributor in North America, scheduled to complete a 353,000 square foot distribution complex along I-275 and Southeastern Freight Lines adding a 25,725 square foot trucking facility off Watt Road.