Suburban Submarkets Faring Better than Downtown

"The suburban markets were the hardest hit in this downturn, but are starting to recover before Downtown," notes the team. Team members include Mitch Bradley, vice president; Sergio Castaneda, senior vice president; John Marold, senior vice president; Brett Nathan, associate; and Brian Kunkel, associate.

The report shows that the Northwest corridor still has the highest vacancy rate, with 36.8% of its space available. However, its availability rate stood at 41.2% in the second quarter of 2003. At that time, it had absorbed $285,594 sf and its average lease rate was $17.19 per sf. In the second quarter of this year, that corridor absorbed 463,274 sf, with an average asking rate of $18.26 per sf.

The Southeast corridor still has the second highest availability rate at 23.2%, but that is an improvement form the 26.5% a year earlier. It showed positive absorption of 122,166 sf, a huge swing from the negative absorption of 86,871 sf in the second quarter. And the average asking rate is now $16.07 per sf, compared with $15.73 per sf a year earlier.

Downtown's market has been hit the hardest. Its availability rate rose to 22.1%, only slightly higher than 21.3% in the second quarter of 2003. However, a year ago, it showed negative absorption of 56,741 sf. That key measure has increased by more than tenfold to a negative absorption of 597,607 sf. And the average asking lease rate fell to $16.70 per sf, from $18.66 per sf, the report shows.