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PHILADELPHIA-A glut of vacancies in the suburban Cincinnati, OH office market, caused by overbuilding and increased subleases during the weak economy, is giving the Downtown Cincinnati office market stiff competition, according to research by the local office of Encino, CA-based Marcus & Millichap. Investment activity downtown has slowed, yet several large transactions recently took place and more are on the way, says the study.

Also, Downtown Cincinnati is “undergoing a makeover,” the researchers say, with several major road constructions that are making it easier for commuters to get to and from work.

The full Cincinnati area’s average office vacancy rate reached 14.9% at the end of last year and is expected to rise to 15.8% this year. Average asking rental rates are expected to remain flat at an average of $17.85 per sf.

Owners are, however, beginning to use more concessions in order to attract and retain tenants. At the same time, they are faced with rising costs for utilities, insurance and security.

Sales activity is expected to decrease until late 2002 or 2003. So far this year, there have been two sales with an average sale price of $55.49 per sf, and sale prices are expected to remain stable throughout the year.

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