Market watchers at Oxford Commercial say the office sector'soutlook is positive although Q1 absorption was just 41,708 sfversus 444,849 sf that was absorbed during Q4 2006. Grubb &Ellis Co.'s research team came up with 261,479 sf of net absorptionin Q1 in the 38.8-million-sf inventory, with last year ringing up1.6 million sf overall.

"Absorption is down across the board throughout the state, butit's still very positive, still going in the right direction," saysErnest Brown IV, managing director for Grubb & Ellis in Austinand San Antonio. "This is more of a statistical slowdown andnothing that has really materialized in the market."

One cue that the office market is firing on many cylinders issublease space has practically disappeared. "Back in 2002, we hadabout six million sf of sublease space available," Brown tellsGlobeSt.com. "I don't even think we have 300,000 sf left forsubleasing."