"2002 proved to be a terrific year if you were a tenant with very little term left on your lease," Daryl A. Mullin, senior director for Cushman & Wakefield of Texas Inc., said of the office market. Dallas did post 2.9 million sf to the negative but, he said, it shouldn't have been a shock since the city, like other Texas metropolises, were battling the aftermath of corporate fallouts from the likes of Enron, WorldCom and Arthur Anderson.

If there is a silver lining in the 40.2 million sf of empty direct and sublease space, it's that the city showed a modest positive gain in the class A sector as tenants traded up. It could be, Mullin said, an indication that the city's office market has finally bottomed out.

Mullin predicted the office market in 2003 will again be in the negative column, but "it's not going to be as dramatic as 2002." Leasing, in fact, should be strong "because of the concessions in the market," he added.

Industrial developers have kept supply in check with demand to keep rent stable, deals flowing and investors flashing capital for existing product. "Cap rate sales are as low as they've ever been," said Jon Napper, senior partner in Dallas for Sacramento-based Panattoni Development Co. The 4.4 million sf that San Francisco-based AMB Property Corp. sold in Houston and Dallas went for $34 per sf, according to Napper, "and a cap at least in the low 8's or high 7's." The end-of-the-year deal was touted as the largest in several years for the Texas industrial market.

Napper said the 9.2% to 10% vacancy in the industrial market is about normal. He pegged absorption in the 3.5-million-sf to 4.5-million-sf range in comparison to a usual 12 million sf to 14 million sf. He's expecting this year's absorption to reach nine million sf.

Multifamily undoubtedly was the 2002 leader when it came to buyers. "I can't remember a year when there was more aggressive capital out there," said Brian O'Boyle, NTCAR's 2002 Stemmons Award honoree and president of O'Boyle Properties. Buyers were plunking down seven-digit non-refundable earnest money. One buyer put up a non-refundable $5 million for a $17-million deal to win the deed. The most aggressive, he said, were the all-cash buyers, fueled by interest rates in the 5.6% to 5.75% range.

Deals typically attracted 25 to 30 offers in 2002. In Dallas, 58 properties in excess of 100 units changed hands while 55 traded in Tarrant County, a buying ground that was new-found territory for some, he said. "We have seen an alteration of an investor's expectation," he noted of those now buying in areas where they once turned their backs.

O'Boyle said this year again will be a buying field as more owners put assets on the market to harvest the multifamily popularity. Aside from buying, though, rent most likely will be flat and status quo in the first nine months before there is a shift in the wind.

Steven A. Lieberman, president of the Weitzman Group, reported a slight decline in occupancy at the close of 2002, but just how much is being kept under wraps until Jan. 28 when the Weitzman team takes the stage for its annual forecast breakfast at Nick & Sam's Restaurant in Dallas. What he did acknowledge, without tipping too much of his hand, is that "discount stores and supercenters are the big stories.