The nation's office market, he said, has been "hammered by losses in total unemployment and the dominant office-using industries. The pain is not confined to just a few markets," he added, saying "30 of the top 50 office markets suffered negative net absorption." Effective rents, he said, "fell nationally by 1.7%" in first quarter. The pace of the rise in office vacancy rates, he also noted, "is the most rapid increase on record."

"Occupancies and effective rents for industrial space will decline through the balance of 2003," Lynford predicted. "Stabilization, but with virtually no growth, will begin in the industrial sector in 2004." Members of what he called "the 15% vacancy club" in the industrial market include Philadelphia, Atlanta, Austin, Baltimore, Boston, Richmond, Memphis and Tennessee. Many others, he added, have a vacancy rate of "just under 15%."

The country's neighborhood and community shopping center market is "the one sector that continues to do well," according to Lynford. He attributes their success to consumers' continuation of "necessity shopping" versus leisure shopping at malls. The nationwide vacancy rate in this sector is 6.8%, up 0.3% in this year's first quarter, compared with fourth quarter 2002, and effective rents average $15.35 per sf, compared with $15.30 per sf in the final quarter of last year.