Maria Sicola, senior managing director of analytics at C&W and a member of GlobeSt.com Think Tank, an advisory board of real estate professionals, notes that last year was an "anomaly." In many markets, most notably the Downtowns, vacancy rates were at 5% and less," she says. "So the rising vacancy rates through mid-year 2001 do no present an imbalance in most markets," she adds.

At the end of Q2 2001, the national Downtown vacancy rate stood at 9.4%, and at 13.6% in the suburbs. C&W predicts the Downtown rate will level off between 10% and 12% through 2003, and between 14% and 16% in the suburbs.

Internet and high-tech firms have brought large amounts of space back to the market, Sicola notes, climbing from 41.6 million sf at the end of 2000 to 75.3 million sf year-to-date. That has been the "driving force behind the increase" in vacancy rates, she says.