Aug. 7--It's worrisome news for Triangle office landlords: The amount of empty space -- aka competition -- is increasing as hiring slows in this relatively robust region.

Now the heartening news: Rents are still rising. And even as a hunk of new space is poised to open, developers are encouraged by growing interest from companies that are expanding or moving to the region.

The Triangle's office vacancy rate, a barometer of the region's economic health, grew to a two-year high of 13.2 percent in the second quarter. That's up from a six-year low of 12.1 percent a year earlier and 12.5 percent during the first quarter, according to a second-quarter market survey by Highwoods Properties.

The survey of 42 million square feet of rentable buildings in Durham, Orange and Wake counties helps landlords and tenants understand their positions in lease negotiations. When there's a lot of empty space, tenants can shop around for a bargain. When space is tight, landlords hold the cards.

In recent years, landlords often were in control as deals were struck. Growing companies gobbled up space, willingly paying record rents.

There are signs that things may be evening out, brokers say, though the recent bump in vacancies likely won't be enough to turn the tables toward tenants just yet.

The slowing economy, for one, is leading to fewer new jobs and delayed real estate decisions.

"We continue seeing uncertainties for expansion," said Brian Reece, a partner at Karnes Research, a Raleigh company that tracks commercial real estate trends. "Tenants are holding onto space, not moving or not making the decision whether to move.

"Some of the speculative space could remain on the market for six to 12 months or longer."

The most recent climb in vacancy came as 688,000 square feet of new space hit the market during the three months that ended June 30. Only 36 percent of the new space was leased when it opened.

One of the buildings -- the 126,000-square-foot Colonnade II -- was empty when it opened. Several other unleased buildings are nearing completion.

All told, space that was vacant in the second quarter represented the biggest quarter-over-quarter increase in the vacancy rate since 2002.

Back then, speculative spaces were being built to support the booming tech market. The sector tanked as the buildings were finished, leaving almost one-fifth of the region's offices empty. Rents plunged, and concessions offered by landlords, such as interior construction and moving expenses, flourished.

Developers and brokers expect vacancies to climb for the remainder of 2008. At least 1.5 million square feet is expected to hit the market by the end of the year, and only half of it is pre-leased.

Still, market observers aren't predicting the abundance of vacant space that typified the early 2000s.

Rents are growing, albeit at a slower pace.