(Crystal Proenza is associate editor of Real EstateFlorida.)

MIAMI-Office tenants in South Florida are attempting to reduce overhead costs at the same time as rental rates are rising, according to the latest market research by Studley Inc. As a result, landlords are offering concessions in an effort to hold the line on occupancy and asking rents.

"We're seeing weaker tenants start to peel off," Thomas Capocefalo, managing director at Studley's Miami office, tells GlobeSt.com. First-quarter leasing activity throughout the South Florida region rose 10.7% from last quarter, but is still down 26% from last year, according to the Studley report.

Rising costs are a cause for concern among both tenants and landlords, with South Florida's inflation rate reaching close to the top of the national charts at 5.8% in 2007, Studley's report stated. The national inflation rate last year was 4.1%, largely due to rising gas prices, housing costs and lowered consumer spending.