Little evidence of U.S. office market turnaround.


ACCORDING TO A SURVEY BY COLLIERS International USA, Boston, the U.S. office market experienced its eighth consecutive quarter of negative absorption, indicating that hopes for a recovery of the commercial real estate markets in the first half of 2003 may have been too optimistic. Fueled by a continued increase, though meager, in the supply of sublease space, vacancy rates nationally pushed higher to 16.3 percent, up 0.5 percent from last quarter and a significant jump from the 14.1 percent recorded a year ago, according to Colliers.

Sublease space accounted for 20.5 percent of all vacant space, totaling 142 million square feet in the United States--double the 70 million square feet of vacancy in a "normal" office market, the Colliers survey reported. Near nonexistent demand, continued job losses and new space being delivered to the market indicate that demand for office space is likely to remain anemic for the next few quarters. Office vacancies are anticipated to drift higher during the year, approaching 17 percent by midyear.

As expected with weak demand, rents once again trended...

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