The update puts absorption citywide at a negative 642,204 sf in Q1. In the past year, the metro's submarkets logged nearly four million sf to the red, "the lowest level on record," O'Connor research team concludes. The CBD was down 134,612 sf.

Richard Zigler, O'Connor's research director, said in the report that the CBD was one of the brightest spots in the first quarter. ChevronTexaco's recent purchase of 1500 Louisiana St., a skyscraper intended to be Enron's headquarters, was a "major step toward finally putting this whole sordid mess behind us," he said. "The question of who would occupy the near empty building had been something of a parlor game in local real estate circles."

The report pegs occupancy at 81.5%, the lowest level in seven years for the 156-million-sf inventory. The class A occupancy has dropped about a point to 84.25% for the 68.9 million sf of product while class B's 57.7 million sf came in at 80.5% leased. The class C market, with 23.8 million sf, is 78% occupied and class D, 72.2%, representing a 4.9-point decline in the 5.8-million-sf inventory.