Developers will deliver 68 million square feet of office space in 2008, up from approximately 55 million square feet in2007. The pipeline is thinning, however, with 45 percent less space in the pre-planning phases today than one year ago.

The vacancy rate is forecast to end 2008 at 13.4 percent, up 80 basis points from 2007. The vacancy improvement that began in mid-2004 came to an end in the fourth quarter of 2007, when developers delivered more than one-third of last year’s total new supply.

Despite the increase in vacancy, asking and effective rents are forecast to rise by 5 percent as high-quality new space is delivered and leases signed earlier in the decade roll over. In 2007, rents grew by more than 10 percent.

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