Sign of a market on fire

So far, development is sparse enough and business expansion is healthy enough that new supply of office space in desirable locations shouldn't overwhelm demand, said Stan Ross, chairman of the Lusk Center for Real Estate at USC. Builders, though, have a habit of being overly optimistic about their prospects.

"Historically our building community is good at adding inventory too quickly." Ross said. "They are optimistic about the ability of the market to absorb their projects."