It's the talk of the town and the phenomenon is such that Charles Heimsath of Austin's Capital Market Research is starting to tabulate the bottom line. He expects to have a market assessment ready in 10 days. "It's got everyone watching with a guardedly optimistic eye," he told GlobeSt.com.

The blame primarily is being laid at the feet of struggling dot-coms, which last year had kept Austin ahead of the state in rents and vacancy levels. Year-end calculations had appeared healthy, but few, if any, had taken sublease space into account, explains Steve McMillon, senior vice president for the Kucera Co. in Austin. "It has got a lot of people concerned," he says. "Until the past three or four weeks, we were lucky to have 100,000 to 200,000 at any given time." He estimates that the once-hailed 3% to 4% vacancy rate is now realistically 8% to 9%, thanks to the sublease space that's being put on the market by companies that are pulling out or pulling back their Austin operations. "It's all changed in a blink," he told GlobeSt.com.

Meanwhile, rental rates may have flattened, but they haven't started a downward spiral, say the professionals. That too will most likely change, predicts Mike Tipps, principal in Colliers Oxford in Austin. "I think there's going to be a correction in the rental rates in the next six to 12 months," he says. "But, I don't think there's going to be any widespread panic." He says there is "tremendous pent-up demand" for space and the underlying question isn't the amount of office space that's come to market, but rather, "what is the demand."

Heimsath views the space availability as "a temporary phenomenon," but he admits "it has a lot of people curious." And in the short term, it might not be so bad because it will "help to relieve some of the pressure on tenants" who have been unable to find suitable expansion space, he says. Certainly, it's not an indicator that Austin is in danger of overbuilding, emphasizes Heimsath. The state capital's under-construction buildings already are 70% leased and they aren't close to delivering, he reports. In the meantime, the eyes of Texas are watching how rapidly the sublease space fills up.