By the summer, vacancy had fallen to roughly 6% but shot back up when Silverstein's 7 World Trade Center came online adding significant empty space. By the end of December, as reported by GlobeSt.com, the one-million-sf building was 60% leased. Most recently, ABN Amro Inc. took 140,000 sf, joining Darby & Darby PC, Moody's Investors Service and the New York Academy of Sciences, as a tenant.

In addition to the approximately 400,000 sf available at 7 WTC, a slowing housing market halted conversion plans that would have taken office space out of the market. Grubb predicts 14 and 95 Wall St., which are both slated for residential conversions, will revert back to office use this year. Plus, there is an additional 10.8 million sf of new office space that will begin construction this year.

Still Downtown rents rose 31% last year bringing asking rents to more than $45 per sf. Grubb predicts additional increases will brings rents above $55 per sf for class A buildings by the end of 2007.