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BELLEVUE, WA-The Eastside office market is definitely in recovery mode, according to the latest data from Colliers International. After starting the year with a vacancy of 17.6%, some 395,000 sf of positive net absorption through the first nine months–including 162,000 sf in the third quarter–has pushed overall vacancy in the 26.6 million-sf Eastside office market to 15.9% of the end of the third quarter. All told, the market has seen five straight quarters of positive net absorption.

The vast majority of the absoprtion has occurred in the class A market, which saw overall vacancy fall from 18.8% at the end of 2002 to 16.7% at the end of September on 356,000 sf of positive net absorption. The biggest beneficiary of the increased leasing activity was the Bellevue CBD. Overall vacancy in submarket’s five million sf of class A space has fallen from 27.5% at the end of 2002 to 21.5% at the end of September on 304,736 sf of positive net absorption, including 51,358 sf in the third quarter.

The best class A performance in the third quarter alone was the I-90 corridor submarket, which saw vacancy in its 5.2 million-sf of class A inventory fall from 17% at the end of June to 15.6% at the end of September on 77,189 sf of positive net absorption. At the end of September 2002, vacancy in the I-90 corridor class A market was 18.3%.

The 5.1 million-sf class B market on the Eastside saw vacancy rise slightly during the third quarter on 15,600 sf of negative net absorption. As a result, class B vacancy at the end of September 2003 was 12.2%. At the end of September 2002 it stood at 13.5%. Through the first nine months of 2003, class B absorption remains positive at 66,665 sf.

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