The CBD ended 2002 with a 14.3% vacancy rate in comparison to the citywide average of 13.8% in an inventory of 174 million sf, said Sanford Criner, principal for Houston-based Trione and Gordon ONCOR International. Sublease space tallied up to 5.2 million sf at yearend or twice the 10-year average.

Criner tells GlobeSt.com that the city's "engines of absorption," namely the merchant energy companies, will not be able to drive the office market this year. Neither, he says, will upstream and downstream energy companies or other large employers like HP, Continental Airlines or Chase Bank. The CBD will have to draw tenants from the suburbs to fill the office space or look to those seeking to relocate from within.

The CBD rent is standing at $27.73 per sf, but that must and will drop, according to Criner. Getting back to the norm of 8% will take a long time, he adds, predicting class A vacancy in the CBD could go to 17% this year. Factor in sublease and phantom space and the CBD could edge closer to 20%.

On the bright side, the CBD construction boom is almost over, says Criner. About 1.3 million sf will deliver this year. In the suburbs, construction too has slowed considerably.

The Energy Corridor has a 2.3% vacancy in its class A space, with an average rent of $24.79 per sf for a submarket with an inventory of 14.3 million sf and available sublease of 338,000 sf. Criner says the corridor always has been a top performer, with its class A product always a market leader. From 1995, to 1998, the Energy Corridor's vacancy in the class A category was 1%.

Westchase, tied in with the West Loop, has the highest vacancy of the suburban markets: 13.25% in an inventory of 16.7 million sf. But, it also led its counterparts in absorption, ending 2002 with 386,000 sf, including sublease. In the past five years, Westchase has absorbed in excess of 420,000 sf.