The average asking lease rate for warehouse space was $6.88 a square foot in the second quarter, a drop of 22 cents a square foot from three months earlier, the report says. Some of the decrease is from landlords reducing their asking lease rates in order to lure tenants.

Another factor in the rate drop was - once again - the lack of new buildings coming into the lease market, Genrich said.

Lease rates in new buildings can run close to a dollar more a square foot than the average because of rising construction costs, government fees and land prices. Those higher rates push up the average asking lease rates.

"We don't have the high-dollar space coming on line," Genrich said.

The vacancy rate for industrial space has hovered around 6 percent, or about 2.1 million square feet, for the past year and a half. Much of that vacancy "is pretty funky space that's hard to lease," said Tim MacEachen of Grubb & Ellis.

As a result, the industrial market is even tighter than the 6.3 percent vacancy rate would indicate. "If there's no place to go, people won't move," he said. "It's kinda selfperpetuating."