In the short term, the suburban Los Angeles office market suffers challenges. As of the third quarter 2001, increasing sublease availability is plaguing the suburban markets. Corporate downsizing, especially in the insurance sector, has reduced the demand for office space.

By the end of 2002, the report goes on to say, stronger demand for office space, particular in entertainment and the aerospace/defense sectors, is expected to reduced the overall vacancy rate 12 %, well below the market's historic norms.

Between the fourth quarter 2001 and 2003 6.9-million sf of new office construction is expected to come on-line in the market. This is a modest 2.1 % annual growth rate of the existing inventory. Over the same period the report cites occupied space increasing at an even greater annual rate of 2.4 %. The predicted strengthening market is expected to see overall asking rent increase by 4.1 % annually to $26.76 per sf by the end of 2003.

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