Vacancy continues to linger around 10% and would likely be lowerexcept that a few large contiguous blocks of class A space becamevacant over the past 12 months. "Smaller properties with steadyincome streams generated from multiple uses will invariably attractbuyer interest," states J.D. Parker, regional manager of Marcus& Millichap's Brooklyn office. "Additionally, the borough'scurrent residential boom should continue to encourage the purchaseof buildings and sites where residential components can beadded."

According to the report, in the borough of Brooklyn, 5,700 newjobs are expected to be added by year's end. Office-usingemployment is expected to expand by 1,600 positions by year's end.Also approximately 150,000 sf of office space is under constructionand expected to be delivered this year, compared with 165,000 sf in2006.

The report states that the reasonably robust local and regionaleconomy will sustain office demand, resulting in a year-end vacancyrate of 10.3%, the same rate as year-end 2006. The Brooklyn officemarket remains reasonably tight and as a result, owners will beable to implement a 6% increase in asking rents this year to $26.95per sf. The median sales price of $339 per sf recorded over thepast year is a 27% increase from the preceding 12-month span.