The numbers come from a survey conducted by Koontz McCombsRealty Services Inc., development, construction and brokeragecompany, based in San Antonio. Although the national and SanAntonio economies has slowed all year, the third quarter treatedthe city roughly. Tenants gave up about 180,000 sf in the quarter,raising the year-to-date negative absorption to 255,000 sf. Much ofthat give back came from AT&T, which didn't renew 50,000 sf atthe CityView Office Building, and SBC Communications Inc., whichdidn't renew 80,000 sf at Corporate Square Tower.

The aftermath of the Sept. 11 attacks exacerbated the marketdeclines, low corporate earnings and layoffs. "The impact of thesefactors has been rippling through our market all year, givingbusinesses reason to pause and take a very conservative approach totheir leasing or expansion plans," Todd McClain, senior vicepresident of Koontz McCombs, says in the report. "The result hasbeen a stalled and slightly declining office market. Unfortunately,the tragic events of last month will only serve to deepen themarket decline."

Rents still posted a small gain in the quarter, going to $17.75per sf from $17.67 per sf at the end of the second quarter. Incomparison, the close of the Q3 2000 was $17.41 per sf. The KoontzMcCombs report says rental concessions are beginning to pop up assmall amounts of free rent.