"The full year 2007 will clearly have the highest absorption so far this decade," says Richard Bowers & Co. president and founder Richard Bowers. "After six years of negative Downtown absorption, Downtown was the leading submarket in absorption year-to-date, also by a wide margin."

The suburban submarkets outpaced the urban submarkets in absorption with 1.93 million sf of absorption versus 1.48 million sf. The report also found that average rental rates increased to $21.08 per sf in the quarter from $21 per sf during Q2. The occupancy rate increased dramatically from 83.86% to 84.98%. Deliveries in Q3 included six new buildings totaling 581,985 sf, the most significant of which was 201 17th St. in Atlantic Station, which has 349,000 sf. The other five buildings were suburban office buildings, each having less than 100,000 sf.

"Year-to-date absorption through the third quarter has already exceeded our mid-year projections for all of 2007, and our outlook for the office market continues to be quite favorable," Bowers says. "With nearly 530,000 sf of deliveries scheduled for [Q4], only 7% of which is committed, we expect that average rental rates will increase to approximately $21.25 per sf with occupancy moving above 85%."