The 1.59 million sf of new space that came online in the firstsix months of the year was easily absorbed by burgeoning demand,the report by the brokerage firm says. The metropolitan areaexperienced gross absorption of 3.8 million sf and net absorptionof 1.96 million sf, leaving vacancy at the start of the thirdquarter a healthy 9.98%--virtually unchanged from the 9.97% vacancyfactor at the start of 2000.

"We are still seeing a tremendous amount of absorption fromexisting companies and from companies new to Phoenix," KevinCalihan, a broker in a local office of CB Richard Ellis, tellsGlobeSt.com. "There isn't a submarket that is soft."

More than 3.59 million sf of new office space is currently underconstruction. Between 1.8 million to 2 million sf of that space isexpected to enter the market in the second half, but all of it willbe gobbled by the area's space-hungry tenants, Calihan says.