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New Report Predicts That Office Space Leased in 2000 Will Exceed Previous Year

PHOENIX-Although office vacancy rates increased slightly during the third quarter of this year, a new report predicts that total net absorption for the year could easily exceed 1999's absorption of 2.4 million sf.

By Patricia L. Kirk | Updated on December 06, 2000

PHOENIX-A new report by industry watchdog Grubb & Ellis predicts that office space absorption for the year 2000 will actually exceed the previous year, despite a slight overall increase in vacancy rates during the third quarter.

Phoenix’s office vacancy rate increased from 11.21% to 11.79% between the second and third quarters of the year, due to the quantity of new space coming on the market. And with new product coming onl-ine matching demand, overall average rental rates increased very little, from $20.75 per sf to $20.80 per sf.

The report notes, however, that historically demand increases during the fourth quarter of the year, which should bring the vacancy rate back down by year-end. The Phoenix market has absorbed more than two million sf of office space year-to-date, so beating last year’s 2.5-million-sf of absorption “no longer appears to be such a tall order,” the report says.

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