In Broward County, the overall vacancy rate was 19.6%, according to Cushman & Wakefield's Office Overview for the third quarter. This is "encouraging," the report states, since it was the second quarter in a row with a declining vacancy rate.

Another positive sign in the market is the positive net absorption. "Demand for office space as noted by net absorption increased during third quarter and now totals 429,595 sf to date, which is 42% higher than was absorbed at this time last year," the report states. However, "Demand for space in Broward County, although improving, is not yet at the level where developers can begin construction on projects previously put on hold."

The county has not totally recovered, though, since its vacancy rate was significantly higher than the 16.8% reported for the third quarter of 2001, the report states.

Class A asking rental rate in the county in the third quarter rose 88 cents per sf to $26.31 per sf, the report states. This was due mainly to completion of the 365,801-sf Las Olas City Centre. The same rate for class A space outside the central business district dropped slightly to $24.72 per sf.

Another third-quarter Broward office report, recently released by Grubb & Ellis Co., shows the overall vacancy rate was up a slight 10 basis points to 19.4%, compared with the second quarter. This was due in large part to the completion of the Las Olas City Centre. The building was delivered with more than a quarter-million sf of available space. This caused the vacancy rate in the central business district to climb 4.6 percentage points to 19.8%.

The Grubb report does show two consecutive quarters with greater leasing activity, making analysts optimistic that a recovery may be coming. "After sitting on the sidelines for the past year or more, some companies are ready to move forward with their space needs," the Grubb & Ellis report states.

Turning to Palm Beach County, the overall office vacancy in this county rose 90 basis points to 17.5%, according to Grubb & Ellis' Q3 office report. This is in line with the 17.4% overall vacancy rate reported for Palm Beach County by Cushman & Wakefield.

The 13.6% vacancy rate in the CBD is up as well; however, this area continues to be the "strongest central business district in South Florida," the report states. This figure compares to 14.4% vacancy rate in the Miami central business district and 19.8% vacancy rate for the Fort Lauderdale central business district.

Average asking rents increased in the third quarter, according to the study. For class A space, this figure rose 65 cents per sf to $27.63 per sf, and for class B space, the number grew 24 cents per sf to $20.08 per sf. "Despite large amounts of space coming on the market, particularly sublease space, owners have been less flexible with quoted rental rates, offering other concessions instead," the report states.

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