But the office market remains in good balance with a vacancy rate of just 7.4%, up only slightly from 6.5% at the end of 2000, and the slowdown appears to be temporary, according to San Diego-based Burnham.
The net absorption is the lowest since 1991, when a net 243,000 sf was leased all year. However, the market of the early 1990s was overbuilt and Burnham expects the fundamentals to remain stronger during the current cycle.
More than 763,600 sf of new office space was completed during the first three months of 2001, and another 3.7 million sf are scheduled for completion before the end of the year, according to Burnham.
An explosion in subleased space--some 1.2 million sf--shows that companies decided to ratchet back plans for expansion, according to the real estate company.
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