A surge in US business activity predictably led to an increase in average office rents that added 0.7% in the first quarter to land at $20.25 in comparison to $20.11 in the previous quarter, reports Reis Inc., a New York-based commercial real-estate research firm. Office rents posted the first increase since the first quarter of 2001, the start of one of the worst downturns in the history of the office market.

The vacancy rate was on average 16% in the first quarter against 16.2% in the previous quarter, dropping for a fourth consecutive quarter.

Landlords will be in good shape for some more time as new-building completions totalled a meager 4.8 million square feet in the first quarter, which is way below the peak of the fourth quarter of 2001.

The net change in the volume of occupied space, called absorption, has been dropping for six quarters. In the first quarter of 2001, this indicator was at 10.1 million square feet, slowing down from 20.1 million square feet in the fourth quarter.

Individually, the best-performing markets was Washington, D.C., with Dallas being the worst in the nation.

The National Association of Realtors reports a 2.2% increase in "pending" home sales and a 10.4% rise from February 2004.