Excluding the small Northeast submarket, the direct vacancy rate ranged from 2.62% in the Northeast to 10.985% in the West. By adding subleased space to the vacancy, the range rises to 8.105% in Midtown to 14.97% along the Southeast suburban corridor."Subleases will have an impact in 2001," Basset says. "The full impact is yet to be seen. However, some owners have slightly dropped rates. New construction will also be impacted. Tenants will now have the option of direct or sublease space to compete with new construction."
The market, however, did boast slightly more than 500,000 sf of positive net absorption in the first quarter. The Southeast suburban corridor led with 332,806 sf of net absorption. The Southwest suburban market experienced negative absorption of 48,734 sf.
Overall, 2001 should be a good year, according to Bassett.
"Projects are well leased, new construction is minimal as it relates to total market inventory, and additional new construction should dramatically slow down," he says.
In addition, many tenants are financially stable and continue to need space, or at least will renew in their current locations.
"Property owners will just have to watch the market closely in 2001 and be ready if changes occur," Bassett says.
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