Prior to beginning I would like to remind everyone that certain information discussed during our call may constitute forward-looking statements within the meaning of the Federal Securities Law. Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that anticipated results will be achieved. For further information on factors that could impact our anticipated results, please reference our press release as well as our most recent annual and quarterly reports filed with the SEC.
The first quarter was a solid continuation of the momentum we built in 2011. My comments will provide an overview on our three key focal areas of operations, balance sheet management and investments. George and Howard will then discuss our operating and financial results in more detail and certainly Tom and Gabe are available to answer any other questions.
First, an overall observation. General economic uncertainty we see every day is moderating the pace of the office market recovery. One day the news is good, the next day not so much. However, the challenge [inaudible] remains positive and based on what we see at least in our markets, the office market recovery is certainly continuing. Vacancy rates continue to decline in most of our markets. First quarter leasing activity in most of our markets was lower than in the fourth quarter of 2011, but generally as expected.
Leasing remained our number one priority and market data supports continued confidence in our business plan. Several of our markets continue to have a tenant driven pricing dynamic, but in other markets we see encouraging signs of rental rate growth. Across the board, in all of our markets, we are still benefiting from a flight up the quality curve as our product is at the top end of the available inventory.Our leasing approach remains tactical, that is in some markets we are increasing rates, lengthening lease terms and creating downward pressure on capital concessions. This approach is working well in Austin, Philadelphia CBD and in Crescent markets in the Pennsylvania suburbs.