The vacancy rate, however, is expected to improve by year end to19%, down from 19.5% in 2003. However, rents generally will remainstable, according to the report prepared by Marcus & Millichapsenior market analyst Jason R. Wong.

Rent concessions continue to be rampant but Wong expects ownersof class B and C properties under 10,000 sf to ease concessionsover the next year. But owners of class A buildings with largeblocks of available space will continue to offer concessions offree rent or generous tenant improvement allowances.

"Recent corporate consolidations in the area have left manyowners searching for major tenants," Wong says. "For example,owners of large office complexes in the northern submarkets, suchas North Central/I-285/GA400, will have to contend with nationaland international corporate tenants wielding pricing power foranother year."