The overall asking rates for office space increased 1.6% to$22.10 per sf, up from $21.74 per sf in fourth quarter 2003. "Therental rate was essentially driven by the class A market, which,though still down 50 cents compared to the same period last year,was up 80 cents to $24.02 (per sf), or nearly 3.5%, for the firstquarter," states the Studley report.

The report distinguishes between asking rates and effectiverates, however. The overall availability rate for the Downtownsubmarket increased to 15.4% in first quarter, compared with 14.9%in the final quarter of 2003. With Cira Centre adding to the CenterCity inventory, the number of contiguous blocks of more than 50,000sf jumped to 20.

This combination of factors gives both large and small tenants alot of options. "As a result, owners continue to try to sign newtenants and hold onto their existing tenants by lowering effectiverents and increasing concession packages," states the report.