PROVIDENCE – In a “Mid-Year 2008 Market View” analysis released today, CB Richard Ellis-New England (CBRE-NE)reported that Providence’s commercial office space saw positive absorption rates during the first two quarters of this year, but suburban Rhode Island posted a “modest” negative rate.

In Providence, there has been a 35,388-square-foot net absorption. That’s been led by high rates of absorption in the Capital Center, Financial and Westminster submarkets. Vacancies in the Providence market finished the half year at 14.48 percent, with 872,249 square feet available from a total of 6.02 million square feet.

“The outlook for the remainder of 2008 in downtown Providence will continue on the same trend of slight positive absorption with asking rents remaining stable,” the report says. “Landlords will get more aggressive in securing tenants during this economic downturn, which should equate to better overall economics for tenants.”

Both Class A and Class B properties are expected to continue to show moderate absorption through Q3 and Q4 and rents “should remain stable,” the report adds. But “concessions from landlords to secure deals will grow.”

In the suburban markets, vacancies were higher. There, the 1.2 million square feet that are vacant account for 16.98 percent of the 7.2 million-square-foot market.

Absorption rates were negative for all suburban submarkets in Rhode Island, and the net absorption was a negative 181,071 square feet.

In December, when CBRE released its 2007 Market Overview, CBRE-NE Executive Vice President and Partner Jay Fluck said that year’s growth in suburban office space “should take several years to absorb.” (READ MORE)

Today, the firm reiterated Fluck’s December statements, saying high vacancy levels make “it likely that suburban landlords will remain under more pressure to consider greater concessions and rent compression to close deals.”

CB Richard Ellis Group Inc. (NYSE: CBG), a Fortune 500 company headquartered in Los Angeles, is one of the world’s largest commercial real estate services firms with about 14,500 employees at more than 200 offices. Additional information is available at www.cbre.com.