In a "knee-jerk" reaction to the dot-com frenzy, some companies banked space to make sure they would have room for future expansions, according to Zach Siegel, a senior director at Cushman & Wakefield. The glut of sublease space and rising vacancy rates are expected to continue pressure on the wobbly market here through the rest of the year, according to a report from Colliers International.

More than 1.84 million sf of vacant sublease space came on the San Jose market during the first quarter of 2001, according to the Colliers report. Added to the 5 million sf of direct vacant space and overall vacancy increased nearly 75%, from 1.38% to 2.41%.

In addition, 11.6 million sf of space being offered for lease or sublease, according to the Colliers report, is not presently vacant. Tenants in possession of this sublease space will "simply consolidate businesses when their space is leased."