The year started off slow as the economy suffered, but showed signs of recovery in the second quarter, according to the report. This sluggish start was due to power supply problems, the flat economy and tightcompany purse strings, the report states.

According to the brokerage, net absorption should increase to about 200,000 sf by the end of the year, a 113,000 sf increase from 1998 and a 141,000 sf decrease from last year. Other area experts have voiced similar optimism. Vacancies in the first half of the year have increased by as much as 15.4% from a year ago, according to local experts. But leasing has recently stabilized, particularly in the last three months.

Prices have also stabilized, with the price per sf near Palomar Airport Road ranging from $2.10 to $2.45 for class A space and $1.75 to $1.95 for class B. But the area won't likely see year-over-year rent increases.