The overall vacancy rate fell for the sixth consecutive quarter to 10.2%, down from 14.3%. Asking rents increased, and the market showed positive overall net absorption for the fifth consecutive quarter. The sublease vacancy rate fell to 2.2%, from 3.3% the previous year.

"The decline in vacancy rate is attributed to large leasing transactions that occurred throughout the course of 2004," says Jim Fagan, senior managing director and head of Cushman & Wakefield's Long Island and Westchester/Fairfield County offices. Some of those transactions included Dreyfus Corp.'s renewal for 94,000 sf and law firm Farrell & Fritz renewal for 49,000 sf both at EAB Plaza in Uniondale and accounting firm Marcum & Kliegman lease of 54,000 sf at 10 Melville Park Rd.

And Fagan expects the good times to continue as a number of firms, particularly in the financial services and consumer products sectors are shopping for large amounts of space. "Many area businesses are moving into an expansion cycle, looking for more space. There appears to be quite a bit of transactional activity and we expect to see many more deals close in early 2005."

That projected activity is also fueling office development. Currently under construction with 2005 completion dates are the 50,000-sf 40 Marcus Dr. and the 277,081-sf 68 South Service Rd., both here as well as 135 Crossways Park Dr., in Woodbury and 50 Jericho Quadrangle, Jericho Those two will add 120,000 sf and 134,000 sf, respectively, to the office inventory next year. None of these buildings have secured anchor tenants as of yet.