"It's certainly challenging right now," says Eric A. Northbrook,executive directorfor Cushman & Wakefield. "It's challengingfor owners, and from a landlord's perspective, there's obviouslymore supply than there is demand."

The 2Q office report, which covers the six months ending June30, shows the countywide office vacancy rate up nearly onepercentage point from 11.8% at year-end 2007, and a coincidingdecline in asking rates, which stand at $2.69 per sf per monthcompared with $2.73 per sf per month six months ago, whil askingClass A office rental rates of $3.09 per sf per month are down from$3.18 per square foot over the same period.

"In corporate America, they're not making lateral moves,"Northbrook says. "I think for the most part, you're seeing a lot ofrenewals and in some cases shorter term renewals."The recentcompletion of 639,000 sf of new office space and negativeabsorption of 102,000 sf during the same period is alsocontributing to higher vacancy, according to the report.