During the quarter, the market experienced its first netnegative absorption of 98,488 sf since 2004. The year-to-dateabsorption is still positive, however, at 142,798 sf, according tothe CB Richard Ellis Q2 Orlando office market report.

However, the economic trends experienced by the region willcontinue to buoy the market through the rest of the year. Localemployers are expected to expand payrolls by 26,000 workers by theyear's end, a jump of 2.3%, according to a Marcus & MillichapQ2 office research report. "Local office fundamentals are robust,"says Marcus & Millichap Orlando office regional manager GregoryMatus. "Long-term prospects remain bright, given the area'spopulation growth and the ongoing emergence of localknowledge-based office-using employment."

Gross asking rental rates have continued to increase over thepast few years from $19.50 per sf from the same quarter in 2005, tothe current quarter's total market average of $21.65 per sf. Theaverage lease rate for class A office space in the Downtownsubmarket is $27.59 per sf, according to CB Richard Ellis.