"We predicted that the office, industrial and R&D markets would see a pickup in leasing activity during the second half of 2002," says Mike Philbin, Burnham Real Estate's managing director of transaction services. "It appears that we are on track to equal the absorption levels that occurred at the start of the 1996 real estate recovery."

Vacancy rates are beginning to decline, albeit slightly, showing that the drop in new construction is beginning to affect supply once again, particularly in the mid-county submarkets, according to Philbin. Lease rates should rise accordingly, he adds.

Unlike 1996, "we simply will not have the land available to support the record levels of new construction we saw between 1996 and 2000," he says.