By contrast, however, year-to-date net absorption was negative 27,568 sf, "a great improvement from mid-year 2002, when the market was experiencing negative absorption of more one million sf," Luff says. "This year's absorption activity is the result of the physical move-in of last year's leasing activity," he points out.
The second-quarter overall vacancy dipped to 13.3% this year, down from 13.7% in last year's second quarter. At the same time, the available sublet space in second quarter increased by 73,000 sf.
In all, Luff says, "the market is holding fairly firm. There is some movement between classes of product. The trophy market, while still strong from a vacancy rate (standpoint), has been hit the hardest with rental rate reductions and tenants relocating to more cost effective alternatives."
According to TC's second-quarter data, class-A asking rental rates continue to "creep up moderately," but remain at least 5% below the rates of two years ago. Not surprisingly, concessions are common, and Luff expects current conditions to remain through year-end.
Ken Zirk, VP of the local Trammell Crow office, and Craig Worton, associate, participated with Luff in the research.
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