Declining net rents, free rent and increasing tenant-improvement allowances have been prevalent in the office market. Building owners are aggressively pursuing the few prospective tenants in the market, trying to fill a glut of office space.As part of their willingness to fill space, owners are more willing to consider short-term deals, according to Colliers Towle officials.

In the first half, there was negative annual absorption of 1.9 million sf that raised the direct vacancy rate to 17.2% from the 14.8% from the previous year, according to the mid-year report. On the positive side, office space available for sublease is starting to fill up, with 1.6 million sf available at the midyear point, compared with the 2.4 million sf available in midyear 2002. If you throw in space available for sublease, the vacancy rate rises to 19.6%, down slightly from the end of the year's rate of 21.1%. Much of the available sublease space is class A.

Among the submarkets, the southwest had the best gains, absorbing more than 179,000 sf, followed by the northeast metro area with an absorption of nearly 45,000 sf. The best vacancy rates were posted by the smallest submarkets of Anoka County, with 3.1% percent, and Washington County, with 3.6%.