The improved leasing activity reduced the overall vacancy levelto 21.4% from 22.3% in the first quarter and increased the averagerental rate slightly to $18.74 per sf. "This could mean somelandlords have begun recognizing the market's improvement and havechosen to reduce incentives that tenants have come to know and loveover the past year," says Colliers Cauble research director ScottAmoson. The Downtown and Northlake submarkets were the only losersin the leasing category. Downtown showed a negative net absorptionof 160,454 sf; Northlake, a negative 406,255 sf. The eight othersubmarkets were all in the positive absorption column.

Midtown, battling Downtown for major tenants, had positiveabsorption of 749,397 sf, with 755,402 sf in the class A sector.Vacancies, however, stood at 21.3% with 3.4 million sf available.Buckhead, another Downtown rival, had positive absorption of365,769 sf. Of that total, 179,935 sf was in class A space and192,606 sf in class B. Buckhead's vacancies are 19.2%.

"Despite having a dismal first quarter, due to large moveouts,including Allitel and Novartis Ophthalmics, the North Fultonsubmarket posted office absorption of almost a half million sf insecond quarter," says Amoson. "A multitude of deals, ranging from10,000 sf to 50,000 sf were the source for North Fulton'simprovement."