According to a new report on the region by Lee & Associates--Irvine Inc., the office vacancy level has risen less than one percentage point in the first quarter of 2002. It has crept up from 17.31% in the final quarter of last year to 18.25% in the first quarter of this year. This marks a significant slowdown, as increases in vacancy throughout 2001 rose more than 2% on average.
The region's rate of negative net absorption is also showing signs of improvement, as net absorption has decreased from negative 454,356 sf in fourth quarter 2001 to negative 144,956 sf in first quarter 2002. This figure illustrates a major shift from one year ago, as net absorption stood at negative 609,165 sf in the first quarter of 2001.
Although the office market here seems to be improving for building owners, they have definitely been impacted by the rise in vacancy over the past year. The average asking lease rate continues to decline, as it has slipped from $2.27 in the final quarter of last year to $2.22 in the first quarter of this year.
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