Previous strength in the market has led to several projects thatwill have brought 151,324 sf of new office space onto the market byyear's end - the highest level since 188,000 sf in 1995. But withvacancy rates rising from 8.7% to 8.8% during the quarter,according to the latest survey by Coldwell Banker Commercial LLC,and a record amount of space coming online, the developmentpipeline is shrinking.

Sources tell GlobeSt.com that development of some product isbeing put on hold because vacancy rates are likely going to risethrough the fourth quarter, putting downward pressure on rentsheaded into 2001. Spence Powell, owner of the Salem office of realestate appraisal firm Palmer Groth Pietka, confirmed fears in theStatesman Journal newspaper last week, saying, "I know of at leastthree or four projects that have been shelved because the market issoft."

As usual, some of the market's success will be determined bygovernment action. While the state could need a little more spaceif some key ballot measures are passed, Marion County is expectedto vacate some of its leased space in the near future, adding tothe total availabilities.