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

Greg Smith, president and principal with Martin Smith Development, the largest privately-held, full-service commercial real estate firm in the Puget Sound, also made predictions for 2001 at the event. Smith believes office rents here will continue to rise through next year, although not as dramatically as the rampant increases over the past 18 months. Also on a less vigorous scale than the recent past, Smith sees surplus demand continuing to fuel the market. Making a point from first-hand knowledge, Smith explains many tenants under Martin Smith-managed buildings are looking to expand, though "not as aggressively" as in recent history.

Another argument for continued increases is the rate of pre-leasing in the greater Seattle area. "Of the current projects under construction in the Seattle CBD, over 90% have been pre-leased," Smith says, citing the example of downtown's largest project. The 800,000-sf IDX building, set for completion in late 2002, has already inked agreements for 80% of its office space. Smith's prediction of increased rates is fed by yet another element, the lack of space available in the Seattle CBD for future development. According to Smith, there are "no more sites left in Downtown as all the full-block sites are already being developed."