The year started off slow as the economy suffered, but showedsigns of recovery in the second quarter, according to the report.This sluggish start was due to power supply problems, the flateconomy and tightcompany purse strings, the report states.

According to the brokerage, net absorption should increase toabout 200,000 sf by the end of the year, a 113,000 sf increase from1998 and a 141,000 sf decrease from last year. Other area expertshave voiced similar optimism. Vacancies in the first half of theyear have increased by as much as 15.4% from a year ago, accordingto local experts. But leasing has recently stabilized, particularlyin the last three months.

Prices have also stabilized, with the price per sf near PalomarAirport Road ranging from $2.10 to $2.45 for class A space and$1.75 to $1.95 for class B. But the area won't likely seeyear-over-year rent increases.

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