The vacancy rated in the CBD continued to increase "at a marginal pace," he says, "indicating that a vacancy peak has either arrived or is close at hand. Vacancy rates actually started to decline in several submarkets, including the entire East Market and class-B space in the Independence Square Market. Surprisingly," he adds, "this is the first time since 1999 that class-A1 space has seen its vacancy rate turn downward."

Asking rental rates dropped $0.11 per sf in the overall suburban market, however effective rates were lower due to concessions. The overall CBD full-service rental rate is $23.74 per sf, which Clements says "is probably 5% to 10% above the effective rate. Tenants still have the upper hand."

Class-A office buildings in the local office market saw more than 770,000 sf of positive absorption this year to date, a mirror image of class-B properties, which had 750,000-sf of negative absorption, an indication that tenants are moving up to better space, rather than a sign of expansions or new companies entering the market.