Year-to-date activity, however, remains negative. The overallvacancy rate dipped slightly to 13.45%, down from 13.73% in secondquarter. However, it is still 2 percentage points higher than itwas in third quarter 2001. On the plus side, there was a 260,000-sfreduction of sublease space in third quarter this year.
Activity in Market Street East during third quarter 2002 wasmore than 30% greater than in the Market Street West submarket.
"For the first time the market is witnessing a number of tenantsmove from or considering moving from the `trophy' product to solidclass-A space," says Bill Luff, senior vice president of the localoffice of Trammell Crow. This will tighten the existing wide gap inrental rates between trophy and class-A properties, he says, withtenants electing more cost-effective opportunities.
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