"After a year of solid positive net absorption and declining vacancy rates, the market quickly came to a standstill" in the fourth quarter of 2002, according to the recent report by BRE Commercial/NAI. Fourth quarter figures show a negative net absorption of 854,749 sf. Meanwhile, the vacancy level rose two percentage points in the fourth quarter to 10%, with the year-to-date vacancy rate leveling off at 9%.

BRE Commercial attributes the significant drop in performance to the excess space that was dumped on the market at the end of 2002. A majority of that surplus space was previously occupied by Tyco, which sold its North County campus last year and has since relocated out of state.

The submarkets that were hardest hit in 2002 were Rancho Bernardo and Poway, which both experienced negative net absorption in the fourth quarter and a 3% to 4% increase in vacancy by the end of the year.