Topley attributes the lack of volume to the distance that was created between tenants and landlords, rather than to a lack of tenants. As tenants began to realize the slip in the market would give them the upper hand and more bargaining power, landlords still weren't prepared to make deals at market rates.

"In the last month, however, I've observed a definite uptick both in the number of tenants seeking space as well as those who are ready to commit to a lease," says Topley. "Last week, two of my clients became involved in competitive bidding situations for spaces. This comes as a surprise to landlords, who for much of 2001, were lucky to receive any offers on their spaces."

This gives realtors hope that San Francisco's commercial real estate market may be heading toward a slow recovery following a huge blow that knocked rates down falling more than 50% in some submarkets. Landlords suffered, real estate transactions decreased, and the market became so bad that rents were drastically reduced.