Vacancies are at 20.1%, down from 21% in the second quarter. Netabsorption is a positive 1.2 million sf but still below the recordtwo million sf set in the second quarter.

Construction of new product has slowed with only 43,000 sfstarted in the third quarter, "a far cry from the peak constructionstarts of over one million sf during some quarters in 2001," saysErik Pawloski, research director at Atlanta-based Bullock MannellyPartners Inc.

"It has appeared that the overbuilding that drove up vacancyrates has, for the most part, muted developers' urges to bringspace to market," says Pawloski. The total space under constructionhas remained constant at about 1.7 million sf for the past threequarters. "A further positive indicator is that of the total spaceunder construction, only 280,000 sf is expected to be deliveredduring the last quarter of the year."