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PHILADELPHIA-Office vacancy rates in the city and surrounding PA suburbsbarely move in first-quarter 2003, compared with the previous quarter,according to a report from locally based Smith Mack & Co./OncorInternational. Yet, the movement, however slight, is in a positivedirection.

In this year’s opening quarter, the direct office vacancy rate in the CBDwas 8.5%, down from 9.1% in the final quarter of 2002. When vacant sublet spaceis included, the current rate is 11.6%, compared with 12% in the previousquarter.

The CBD market absorbed nearly 171,000 sf in first quarter. The averageasking rental rate for direct space only in the CBD stands at $21.74 per sf,plus electric, according to Smith Mack data.

Direct office vacancy in the PA suburbs during first quarter is 16%, downfrom 16.6% in fourth-quarter 2002. With the inclusion of vacant subletspace, suburban PA office vacancy is 21%, compared with 21.6% in the previousquarter.

Approximately 435,000 sf of PA suburban office space was absorbed duringfirst quarter. Smith Mack reports that the current average asking rentalrate on direct office space in these suburbs is $22.73 per sf.

The average asking rent for office space in competing Wilmington, DE, wherethe overall vacancy rate is 21.3%, is $17.87 per sf. This is comparable tothe $17.90-per-sf average asking rental rate in Southern NJ, where theoverall vacancy is just 12.1%, according to Smith Mack data.

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