Direct vacancy in the CBD was 9% in second quarter, up from 8.5% in first quarter. Despite rising vacancy, the average asking rental rate for direct space in second quarter was $21.82 per sf, plus electric, according to Smith Mack. That's up marginally from an average of $21.74 per sf in the CBD in the opening quarter of this year.

The overall office vacancy rate, including sublet space, in the PA suburbs outside Philadelphia rose to 22.3% in second quarter, up from 21% in the first quarter of the year. Direct space rose from 16.6% to 17.7% in the same timeframe. The average asking rental rate for direct space in the suburbs rose to $23.14 per sf in second quarter, compared with $22.73 per sf in the previous quarter.

Second-quarter net absorption in the suburban office market was a negative 275,890 sf. For the year, however, Smith Mack data shows 177,015 sf of positive absorption. In addition, in respect to the entire Greater Philadelphia office market, Smith Mack researchers see "reason to be cautiously optimistic" about this year's second half. Among the reasons is a forecast of lower unemployment by both the Philadelphia Federal Reserve Bank and the Chamber of Commerce.