According to recently published research by Lee & Associates, South Orange County experienced positive net absorption of 485,000 sf in the second quarter of 2002--the first positive quarter in two years. As a result, vacancy rates for office and flex-tech space had fallen back to 15.23% by the end of June from 18.25% at the end of March.

"In recent months the office market has experienced consistently increasing positive net absorption fueled by slowing construction activity and lower average asking rates," the report says. The average asking lease rate has dipped slightly from $2.22 in the first quarter to $2.21 in the second quarter of 2002.

The report comes on the heels of a Voit Commercial Brokerage report stating that vacancies have risen and absorption has dropped in the Orange County office market as a whole during the second quarter. According to Voit's research, the total amount of office space available in the county, including both direct and sublease space, had increased to 16.41% by end of June from 15.71% at the end of March on 383,558 sf of negative net absorption.