"It's definitely slowed down and there's not a large volume oftransactions," Mitch Rothstein, senior vice president withTranswestern, tells GlobeSt.com. "People are waiting to see abottoming or stabilization of the economy, and until then, therewill be fewer transactions just because people are really delayingthe decision-making process and sitting on their hands. If theydon't have to do something, they don't want to do it."

In Q1, the metro Chicago area experienced negative 5.2 millionsquare feet of net absorption, falling sharply from positive 69,000square feet in Q4 2008. Despite that, NAI Hiffman's market reportreleased in late March suggested that absorption would not remainnegative for long. "Absorption rates should trend more positive asconstruction has largely stopped and much of the vacant spacethroughout the market is absorbed," the report says.

New development is at a standstill, and has been for more thansix months, Rothstein says. According to Transwestern's research,the pipeline has shrunk dramatically, by more than 50%, to 2.3million square feet currently under construction from 5 millionsquare feet at year's end. "If something wasn't started after thesummer of 2008, it didn't start," Rothstein says. "Hopefully we'regetting to a stabilization of the economy, but it depends on thebanks and the credit markets. The real estate market is a bit of alagging indicator, you'll see it from the banking and financialside before the real estate side, but for now, loans are still verydifficult."

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