The affects of the severe downturn in financial services, which has plagued Boca Raton's office market, as an example, look worse on paper, because Boca Raton is a relatively small submarket, with only 11.4 million square feet, says Erickson. In these submarkets, the loss of a large tenant becomes magnified.

An even clearer example of the magnification phenomenon can be found in Palm Beach County's Delray Beach submarket, which has only 1.4 million square feet and a 58.9% vacancy rate, which is due to the loss, nearly a year and a half ago, of Office Depot, a huge tenant. But the office supply retailer, which now resides in a 625,000-square-foot space in Boca Raton, moved only two and a half miles away, says Erickson. In a place like Delray Beach, "even a 10,000 square foot lease can move the dial," he says.

The Palm Beach County office market, and the Boca Raton submarket in particular, are stabilizing, says Erickson, but it is hard to characterize them as doing well. The Boca Raton market, in first quarter 2010, according to the CB Richard Ellis MarketView report, had a total vacancy rate of 29.5%. Corporate cut-backs,as well as the financial meltdown, have taken their toll, says Erickson. When Washington Mutual moved out of its 170,000-square-foot-space a little over a year ago, that really hurt, he says.

The West Palm Beach submarket, the second largest in Palm Beach County with 5.7 million square feet, has fewer swings, says Erickson. "That's because it is the county seat and law firms and estate planners are entrenched there."

According to the MarketView report, the Palm Beach County office market will continue to experience modest demand until the broader economy starts to rebound. As of first quarter 2010, office employment, mostly related to financial or other services, stood at 119,200 workers, according to CBRE Econometric Advisors. Over the last five years in Palm Beach County, office employment has declined 2.2%, but over the past 12 months, it has declined 4.5%. These declines deeply affect the office market. Office employment is projected to grow by 9,100 jobs during the 2010-2011 period, according to Econometric Advisors.

To cope with the financial uncertainty, says Erickson, some tenants are taking short-term leases of only three to five years. "You are talking about well-entrenched financial firms, for which three to five years is not a long time," he says. For smaller, entrepreneurial businesses, "We are seeing short-term extensions for only one or two years," says Erickson.

The good news for tenants in Palm Beach County is that office rents are down about 25% since the onset of the financial crisis. "In mid 2006, there were some businesses which wouldn't look at Boca Raton, because it was too expensive," says Erickson. "Now, they can, because office space and housing are more reasonably priced."

And while Palm Beach County tenants are getting better deals from their landlords because of the recession, owners of existing properties are getting a boost from the fact that office construction has come to a halt and many of the planned projects which were expected to start in 2009, have been placed on hold for the foreseeable future.