Second-quarter vacancies are up from 10.9% in the first period to 12.4% overall, the highest in five years. The 6.32 million-sf Downtown submarket is at 10.6% vacancy, but the 22.57 million sf in the 10 suburban pockets is at 12.9%.
Sublease space has doubled from 274,182 sf in the first quarter to 484,148 sf. Still, rents are holding up as more property owners dangle concessions in the form of free rent and increased tenant improvement allowances. Compared to second quarter 2000, asking rents are up by 12 cents for class A and seven cents for class B.
"Overall, the market downturn appears to be a demand-side rather than a supply-side problem," Grubb & Ellis broker Andrew E. McCaw Jr. tells GlobeSt.com. "Demand has slowed significantly but it is not non-existent."
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