With 23 million sf available and rents decreasing slightly,landlords continue to offer concessions and flexible terms.However, "because of an improving economy and continued job growth,a significant reduction in sublease space and only 140,000 sf ofnew deliveries scheduled for the remainder of the year, the officemarket will improve through year end 2004 and into 2005," predictsRichard Smith Jr., a broker at Richard Bowers & Co. whoparticipated in assembling the second-quarter office report.

Positive absorption for the quarter totaled 471,047 sf whichSmith calls "healthy, but not as robust as we expected." Rentalrates dropped by 16 cents per sf to an average $20.24 per sf. The514,314-sf SouthTrust building at Atlantic Station was the only newdelivery during the quarter.

Limited new construction scheduled for 2005, totaling only420,000 sf, is also expected to improve the area's office leasingsector. "We anticipate at least two million sf of positiveabsorption for the remainder of 2004, which will result inoccupancy rates increasing by more than a percentage point to 83.2%from the current 81.7%," Smith says.