"That's the key to understanding this market," says Robert Kramp, the firm's regional manager of client services for the Southern US. The team is trying to find out why asking rents haven't nose-dived in the quarterly reports despite the economy, despite Dallas' hold as one of nation's emptiest CBDs, despite the high sublease count and despite the sagging job market.

The answer will be contained in Grubb & Ellis' 2003 forecast due out in December, GlobeSt.com is told. Preliminary research pegs the gap somewhere between 15% and 20%. It could run as deep as 30%, Kramp says of the must-have information for the 2003 outlook.

Or is the answer that brokers, on both sides of the bargaining table, are maintaining rent levels by getting bargains for their clients and lights turned on for building owners without gouging each other? Kramp says that's one question that only the brokers can answer.

He does believe tenants should start finalizing their deals now because "the early part of '03 is going to be rock bottom" in terms of rates and perks. Rent isn't going to fall below those levels, of that he's 99.9% sure.

Kramp does want to see another quarter of slowed negative absorption before he says, without hesitation, that the corner's been turned. The pace of negative absorption slowed for two consecutive quarters. The third quarter rang up a negative 207,002 sf, amounting to about 15% of the year's losses. It was 1.97 million sf to the negative last year at this time. Market wide, the vacancy is 24.1% in the 184.5-million-sf inventory.

The Dallas CBD, notorious for its numbers, actually pulled ahead 147,000 sf on its absorption level because TXU vacated an owner-occupied building for the multi-tenant Lincoln Plaza. The Dallas CBD's bright note is offset by continued concern over its 28.4% vacancy. Fort Worth's CBD is 17.7% vacant, but the inventory is just a fraction of the Dallas building count. Though smaller, Fort Worth is commanding higher rents: $23.21 per sf versus $22.14 per sf for class A and $17.69 per sf versus $16.34 per sf for class B.

The numbers suggest Dallas-Fort Worth developers and their lenders did in fact learn from the 1980s' crash. Spec construction is being held to just under 1.2 million sf in comparison to 3.3 million sf that came out of the ground last year.

But, there's still 9.2 million sf of sublease space up for grabs, of which 43% is sitting in Las Colinas and the Telecom Corridor's host cities of Richardson and Plano. The sublease count dropped due to natural lease expirations and bottom-fishing tenants, concludes the research team.

"The tenants who are in the market clearly understand they are in the driver's seat," Kramp says. There also are some REITs slashing rents to fill buildings at any cost, Grubb & Ellis reports. Initial research shows the spread between class A asking and effective rents is 27% with TIs in excess of $35 per sf. Sometime in December, Grubb & Ellis will package the fact and the fiction across the classes for public scrutiny.