"The model refers to asking rental rates, versus effectiverates," W. Whitney Hunter, VP and regional director of leasing forJLL here, tells GlobeSt.com. "In the CBD, we see asking rate growthof about 1% per year. In effective rates, however, we see atightening in the market." The model includes the impact of threenew office towers in Center City: Cira Centre, which Hunter expectsto come on line in January 2006; Liberty Property Trust's OnePennsylvania Plaza as headquarters for Comcast, and an additional,smaller office building for the Towers Perrin law firm.

Hunter notes that Liberty's decision to go forward with One PennPlaza is "in limbo, awaiting resolution of the KIOZ (tax break)controversy. One way or the other," he adds, "for the typicalPhiladelphia deal of 20,000 sf, there won't be much impact."

At the end of this year's second quarter, the Downtown officevacancy, including sublease space, stood at about 13.5%, up from13% at the end of 2003, but down from 14.1% at the end of 2002,according to JLL data. Meanwhile, the suburban vacancy rate as ofJune this year was almost 23.8%, just slightly up from the previousyear, but up significantly from the already-high 19.2% at the endof 2002.