Through May 2000, most of the square footage coming to marketwas sublet space. But for the first time this year, direct spacehas become a major factor, amounting to almost half the subletspace.

Like the month before, in June Midtown South posted the highestvacancy rate, 8.7%, up 0.4%, while in Midtown and Downtown the raterose to 6.5% and 6.2% respectively. The highest negativeabsorption, 2.1 million sf, was recorded in Downtown, most of it inthe Wall Street area. Midtown South was also a victim of growingnegative absorption, the bulk of it from 360 Park Ave.

Not surprisingly, overall asking rates continued to slide inJune, declining 2% to $53.43 per sf for the month and 6% for 2001.In Midtown, rates have come down 4% since January and for the firsttime in more than a year are nearing sub-$60 per sf.

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