In its latest market report, CB Richard Ellis calculated vacancywas 12% in the eight-million-sf inventory. Tucson experts tellGlobeSt.com that the vacancies are more due to internal businessshifts rather than of people leaving the area for greener climates."We've had a lot of build-to-suits and tenants going to those,"says Bruce Suppes, senior associate and office specialist in CBRE'sTucson office.

Also impacting vacancy rates are office condos. According toSuppes and Buzz Isaacson, broker with Tucson-based Buzz IsaacsonRealty LLC, those purchasing office condos are primarily medicalfirms and professional companies, such as lawyers and financialplanners. "Almost all of our growth is internal," Isaacsonexplains. "These days, I'm dealing with two lawyers splitting offfrom a firm and going out on their own and needing space or amedical group that needs an additional location to expand. This isas opposed to someone from outside the area scouting Tucson andcomparing it to other cities."

What's also driving smaller users to the office condo arena isescalating lease rates. Suppes points out that triple net leasesaverage $20 per sf. Add tenant improvements onto that and the leaseend up close to $30 per sf. As a result, he says "a lot of folksfelt like buying office condos was the way to go."