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ATLANTA-Consider it official: The commercial real estate market is sluggish, at best. According to the Federal Reserve’s Beige Book, the sixth federal district, based in Atlanta, is facing large amounts of sublease space and rising vacancy rates.

The industry already knows that vacancies are rising and construction is waning in Atlanta and the surrounding region.

“As a result of recent events, additional projects have been postponed or cancelled,” the report says. “Industry contacts indicated that a significant pick up in regional commercial construction is not expected until next year.”

The district covers Alabama, Georgia, Florida and parts of Louisiana, Mississippi and Tennessee.

Bill Leonard, founder and president of Atlanta-based Wm. Leonard & Co., is blunter than the Fed.

“There is lots of sublease space and anyone would be a fool to start a new office building today without a major lead tenant,” he tells GlobeSt.com.

The firm deals primarily with high-tech companies, but Leonard stresses that the slump is hitting all areas of commercial real estate.

“This is not tech-related but related to the economy in general,” he says.

Third-quarter office-market numbers from Atlanta-based Richard Bowers & Co. show vacancy rates are 10.61%, compared to 8.48% for the third quarter of 2000.

Atlanta and the rest of the sixth district are not alone. Each district reported weak economic activity in September and the first weeks of October, with a marked slowdown in commercial and industrial construction.

The news is a little brighter in the fifth district, which includes the Carolinas, Washington, DC, Maryland, Virginia and West Virginia. According to the report, while leasing activity was almost non-existent in the week following Sept. 11, the office and retail sectors “have shown resilience in recent weeks.”

The Beige Book is published eight times a year.

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