"Dallas over history is the last to move into a recession and the first to come out," Bob Edge, vice chairman of Cushman & Wakefield of Texas Inc.'s Dallas office, tells GlobeSt.com. That's the good news. The hard-hitting news is leasing is at its slowest pace since 1992 and "the projected balance of the year is pretty bleak," he says.

It's now a tenant's market and time to employ the 4 R's of leasing: renegotiate, restructure, renew or relocate. That, says Edge, will comprise the bulk of the activity for the rest of this year. "We will see some activity," he says, "and that will help. Smart tenants will be out there taking advantage of it. It's a great time to do some deals." Credit-strong tenants are being wooed with "plug-n-play" perks, high TIs, free rent and free parking by building owners and sublessors alike.

The region's 6 1/2-million sf of sublease space has gained a decided edge in the market, says Edge, a founder of C&W's Dallas office. Though problematic to hustle, the sublease office space now on the market "is a threat to direct vacancy." That's a first in Edge's 25-year career.

C&W's latest market analysis--sans sublease space--shows some 28 million of class A, B and C space is available, creating an overall vacancy of 18.2%. The CBD's vacancy is riding at 24.7% and the suburbs, 16.6% in comparison to 26.1% and 13.9%, respectively, at midyear 2000. By C&W's accounting, there had been slight positive absorption of 65,000 sf, a contradiction to others' calculations. That positive stride occurred in the final Q2 months and offset the first quarter's negative absorption. Edge attributes the 65,000-sf absorption to the delivery of build-to-suits, a factor that's not present in the third-quarter scenario. Still to come will be 5.3 million sf of new product, some of which already is committed.

The region is seeing the trickledown effect of rising unemployment, now standing at 3.9%, and very little in the way of job creation. Edge expects it will stay much like that through year-end, at which point the labor market will stabilize as the corporate world starts to rebound.

C&W, like other brokerage firms in the region, will continue to court California firms in bids for relocations as the business world looks at ways to shave costs at all operational levels to stay afloat in a precarious economy. Some, says Edge, will weigh savings versus "getting past the notion of driving down to Carmel over the weekend." There won't be a mass migration, but it could be significant.