The overall vacancy rate is 40 basis points better than the first quarter number, but a half-point worse than the second quarter of 2004. Tenants continue to take advantage of market conditions to add additional years to their deals at current lease rates. "A fair amount of leasing activity transpired with many tenants actively investigating options for early renewals and extensions, but without additional space needs," explains CB Richard Ellis senior vice president David Tropp.

Vacancy increased to 11.6% in the North Michigan Avenue submarket, which nonetheless is the healthiest Downtown area. A few blocks west, the vacancy rate is 26.2% in River North.

Meanwhile, the firm sees at least two reasons for optimism as Global NetXchange LLC has decided to relocate from San Francisco and Mittal Steel is exploring Downtown locations as well as alternatives near its home base in northwest Indiana.