Richard Zigler, director of research at O'Connor tells GlobeSt.com thatasking rates among all classes as of the first quarter of 2002 were at$19.45 per sf. Rents have continued to slide since then to the currentasking average of $17.82 per sf overall.
From the first quarter of 2003 to the second quarter, rents haveexperienced a decline of 16 cents per sf. Zigler says that the largest fallin rents is among the oversupplied class A market. Class A rents fell 33cents per sf this quarter to $20.43 per sf overall.
Other performance indicators are equally disenchanting. The reportindicates that the second quarter posted negative absorption of 1.15 millionsf from the first quarter of this year. Over the past year, the officemarket has had negative absorption of nearly three million sf.
Occupancy was also down in the second quarter to 83.4% from 84.26% in thefirst quarter and 86.52% a year ago.
In the report, Zigler calls the office market the "weakest sector ofcommercial real estate in Houston." Zigler does say, however, that much ofthe softness in the market is concentrated in the CBD and Galleriasubmarkets while many suburban markets are prospering.
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