"In the coming year, a combination of lower job growth andrecord space under construction will likely help push vacancytoward equilibrium rates as the national economy slows," it said.According to Delta, the nation's overall vacancy rate--a numberthat includes the sublease vacancy--was 10.5% at mid-year 2007. Atmid-year 2006 that number was 11%--a decrease of 50 basis points.Two years ago, at mid-year 2005, the national vacancy rate was12.6%.

Washington, DC is among the top three cities--following New YorkCity, and before Los Angeles-Orange County--that are expected tolead the nation in net office space absorption this cycle.Washington, DC's federal presence--particularly the defense andsecurity sectors--will continue to buoy the area. Also, Deltanotes, construction remains strong here. For their part, New Yorkderives strength from the financial and professional servicesindustries and, Los Angeles, from manufacturing, trade andtourism.

Signs that office absorption in Washington, DC is headingtowards greater equilibrium are already manifest. Delta reportsthat the Washington, DC area, which has an office vacancy rate of9.1%, absorbed 1.7 million sf of office space in the first half of2007. For the period 2004-2010, it is expected to absorb an averageof six million sf per year. The area had 18.4 million sf of officespace under construction at mid-year 2007, of which 35% ispreleased.