Downtown is the place to be in New Haven – at least for lawyers, bankers, government officials and pretty much anyone else who wants an office in the city.

Strong demand has left the central business district with a healthy 10.1 percent vacancy rate, and the office market in that area continues to tighten, according to Colliers Dow & Condon in New Haven. Meanwhile, the non-CBD district, which is dominated by Class B office space, showed a vacancy rate of 22.5 percent at the end of the second quarter.

“There is a very clear trend going on here,” said John Keogh of Colliers Dow & Condon’s New Haven office.

The disconnect between vacancy rates in downtown New Haven and in the city’s non-CBD also can be seen in the difference between vacancy rates for Class A and Class B properties, especially in the non-CBD.

Class A office space showed a vacancy rate of 10.7 percent in the non-CBD at the end of the first half of the year, while Class B space showed a vacancy rate of 28.4 percent. The amount of Class B inventory in the non-CBD is almost 1.4 million square feet, almost twice that of Class A inventory.

The non-CBD’s Class A office space is made up of a single two-building complex that is almost fully leased. Two Class B buildings in the non-CBD make up for nearly one-third of the vacancy in the entire city, Keogh said. Without taking those into account, the vacancy rate for all New Haven office space is 10.4 percent.

In the CBD, however, both classes of office space are doing well. The vacancy rate for Class A properties is 11.2 percent, while the vacancy for Class B space is 9.3 percent.

That trend means that rents in the downtown area likely will begin to go up, and that the market will tighten, Keogh said.

“What that means [first of all] is that … rents are likely to start rising in the CBD,” he said.

If that happens, and if the space downtown continues to be filled – as has been the trend for the past few years – the vacancy rate in the non-CBD will probably go down, according to Keogh. But for the time being, he said, downtown New Haven remains the most desirable location in the city.

“Generally, tenants like to be downtown for the sake of convenience,” Keogh said.

‘A Tighter Market’

Although the vacancy rate in the downtown area is low, the lack of space and other factors have led to little new activity, according to Chris Nolan, senior commercial associate at North Haven-based H. Pearce Commercial Real Estate Services.

“It’s dead,” he said.

There has not been construction of Class A offices there in years, so space is tight. Parking in the CBD also is becoming more expensive, so unless a company needs to be downtown, they often are looking elsewhere.

“People don’t need to be in [the downtown area],” he said.

Most activity in the CBD has been residential, with new condominiums and apartments being built quickly.

So a lot of commercial activity has taken place in the suburbs. North Haven and Hamden are attracting medical offices, and doctors also have been moving to the Shoreline area because the upcoming construction of the Quinnipiac Bridge is expected to disrupt traffic to and from the city.

There were some major transactions in the first half of the year. United Healthcare vacated 30,000 square feet at 157 Church St. in New Haven, also known as Connecticut Financial Center. H. Pearce subleased some space in that same building to Yale University, which maintains its appetite for office space, according to Nolan.

United Healthcare moved to Rocky Hill as part of a consolidation with several other offices. That move raised the availability of Class A space in the CBD from 8.4 percent to 11.2 percent and the overall Class A rate for New Haven from 9 percent to 11 percent, according to Colliers Dow & Condon.

The overall office vacancy, however, dropped from 15.6 percent to 15.4 percent because of activity from small tenants. The Connecticut Department of Mental Retardation leased 14,000 square feet at 370 James St. and the Army Corps of Engineers leased 5,200 square feet at 55 Church St.

During the first quarter, also left a Class A building in New Haven. According to Colliers Dow & Condon, vacated 31,000 square feet at 545 Long Wharf Drive for 18,000 square in a Wallingford building.

AT&T owns that building and, although the space vacated is considered vacant and technically available, AT&T has not made any moves toward seeking a new tenant.

Both Keogh and Nolan said they expect activity to remain level for the rest of the year.

“You always get surprises,” Keogh said. But barring any major ones, “there’s a gradual trend toward a tighter market,” he added.