Total transactional activity so far this quarter is 687,000 square feet. Approximately 82% of the activity took place in the Financial District and 23% of it was sublease transactions, according to the report. Last quarter and last year, total transactional activity was much higher by this time, a lower percentage of deals were in the Financial District and a lower percentage were sublease deals.

Colliers International's San Francisco research director Tove Nilson tells GlobeSt.com she is "optimistically" predicting total volume for the quarter to come in at around 1 million square feet. That would be a 44% decline from 1.8 million square feet in the third quarter, when 68% of transactions took place in the district, and 37.5% decline from 1.6 million square feet in the fourth quarter of 2007, when 56% of transactions took place in the district.

The overall weighted average rent on the Financial District deals was $41.34 per square foot per year, down from $56.17 in the third quarter, when 10.6% of transactions were sublease deals, and $53.14 in the fourth quarter of 2007, when 10.7% of transactions were sublease deals.

Jay Sternberg is an SVP with Colliers who specializes in representing tenants. As rents continue to decline tenants, Sternberg says tenants will be in a position to renegotiate leases they signed in the past few years when rents were at their peak.

"As Downtown landlords shift their focus from pushing rents to securing and maintaining occupancy, expect savvy tenants to seek lower rental rates in exchange for additional term on their existing leases," he says.

With a weighted average rent larger transactions have a greater affect on the resulting number than smaller deals. The fourth quarter non-weighted average class A rent in the Financial District was $40.88 per square foot overall, down from $51.52 in the third quarter, according to Colliers. The non-weighted average in the fourth quarter of 2007 was $42.25.

"The financial firms and hedge funds, they are the ones that would pay high rents for the top luxury space," Nilson says. "Those tenants aren't there anymore."