While everyone wants to see a few quarters of positive absorption--which will be a sign that the market has reached the bottom and is on the upswing--the negative absorption in the first quarter was good news.That's because it is a fraction of the 1.034 million sf of negative absorption in the fourth quarter of 2002, according to the Trammell Crow report.
Indeed, the 167,388 sf of negative absorption was the best performance since the second quarter of 2002, when negative absorption was only 21,632 sf.
Class A properties recorded positive net absorption of 119,180 sf in the first quarter, while Class B projects posted negative net absorption of 322,244 sf.
"The Class B market is definitely losing tenants to Class A properties," according to the report."Total occupancy costs are often the same or even lower over the least term for tenants wishing to upgrade to newer, nicer space."
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