The average vacancy level of 10.5% is up 0.74% from last quarter and 1.8% in third quarter 2001. The market's softest numbers are in net absorption--a negative 528,704 sf in the third quarter versus a negative 23,462 sf in the second period. Absorption from fourth quarter 2001 to date is at a negative 295,353 sf.

"The downsizing and vacating of financially weak local and regional firms unable to survive depressed economic conditions is one factor contributing to the decline," ColliersArnold research analyst says in his report.

But he tells GlobeSt.com leasing activity is expected to rally by year end or first quarter 2003 when several big deals may close. "These deals are a sign that some businesses see positive future prospects," Palta says.