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

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Colliers International's San Francisco research director ToveNilson tells GlobeSt.com she is "optimistically" predicting totalvolume 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 thethird quarter, when 68% of transactions took place in the district,and 37.5% decline from 1.6 million square feet in the fourthquarter of 2007, when 56% of transactions took place in thedistrict.

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

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

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

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

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

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