Overall vacancy is expected to remain relatively flat throughout the rest of the year, as many are waiting to see how strong the economy will be in the first quarter of 2012, said Grubb & Ellis research manager Dave Dworkin. While lease rates continue to decline, landlords of largely vacant office buildings can only come down so far to compete. Lease rates are expected to level off in early 2012. Office vacancy increased to 23.4 percent in the third quarter, up 30 basis points from the second quarter, with roughly 106,500 square feet of negative net absorption. Lease rates in both Class A and Class B space continued to steadily decline as landlords compete to attract new tenants. Both the downtown and west submarkets experienced the most noticeable lease rate declines, while vacancy in those submarkets rose slightly.
