"Despite some weakening, there is price rise in the suburbs," says Joseph Harbert of Cushman & Wakefield. C&W stats say that as rental rates continue to climb, the office market velocity slows. The firm points out that "future construction and capital improvements on existing buildings continue to fuel the increasing rental rates, while simultaneously flattening vacancy rates."

According to CB Richard Ellis' First Quarter 2006 Long Island Office Market Report, the area posted just 330,000 sf in total leasing activity. In Nassau County, total leasing for the first quarter totaled 214,000 sf, down from the 353,000 sf leased during the previous quarter. Consequently, the market experienced negative absorption of 40,000 sf. Following a strong fourth quarter, which netted 279,000 sf of positive absorption, Suffolk County returned to negative territory. The office market posted negative absorption of 108,000 sf on just 116,000 sf in total leasing activity.

The overall office vacancy rate for Nassau and Suffolk counties was 11.07% for the 2006 first quarter, according to Sutton & Edwards Inc./TCN Worldwide. That compared with 10.42% at the end of the fourth quarter last year and 10.2% in the 2005 first quarter.