"We see a lot of exciting opportunities (here), but we have tobe very cautious," said Carr, who believes Seattle will be unableto sustain the enormous spikes in demand it experienced in thefirst half of 2000. Nonetheless, Seattle remains a favorite of theWashington DC-based REIT, which has selected the city as one ofonly three markets into which it plans to "invest incrementalcapital over the next 12 months."

Greg Smith, president and principal with Martin SmithDevelopment, the largest privately-held, full-service commercialreal estate firm in the Puget Sound, also made predictions for 2001at the event. Smith believes office rents here will continue torise through next year, although not as dramatically as the rampantincreases over the past 18 months. Also on a less vigorous scalethan the recent past, Smith sees surplus demand continuing to fuelthe market. Making a point from first-hand knowledge, Smithexplains many tenants under Martin Smith-managed buildings arelooking to expand, though "not as aggressively" as in recenthistory.

Another argument for continued increases is the rate ofpre-leasing in the greater Seattle area. "Of the current projectsunder construction in the Seattle CBD, over 90% have beenpre-leased," Smith says, citing the example of downtown's largestproject. The 800,000-sf IDX building, set for completion in late2002, has already inked agreements for 80% of its office space.Smith's prediction of increased rates is fed by yet anotherelement, the lack of space available in the Seattle CBD for futuredevelopment. According to Smith, there are "no more sites left inDowntown as all the full-block sites are already beingdeveloped."