"Demand from telecom-and internet-related firms has evaporated, as a result of the depressed stock values in those sectors," Fenster says. "Most of the new developments proposed last year by these companies are also dead."

Recent reductions in interest rates have not yet translated into a rise in leasing activity, Fenster adds. "Reductions have also not impacted sales during first quarter 2001. Lending practices continued growing more conservative, with lenders requiring higher equity-to-debt ratios of their borrowers," he adds.

On a good note, steady sales of 10,000-sf to 20,000-sf suburban buildings continue at the same relatively brisk pace of the last several years. "Demand for these smaller buildings is less vulnerable to economic slowdowns, because successful entrepreneurs with cash and solid relationships with their bankers will always seek these," Fenster says.

He says there were still few major office properties available for acquisition during first quarter 2001.

"Just one major office project -- the Gateway building at 12 Mile and Farmington Road -- was offered by ARCON, a Texas-based pension fund advisor," he says.

The suburban office market received approximately 117,000 sf of newly completed construction during first quarter 2001.

"The larger, more financially secure developers are continuing to build speculative office projects throughout suburban Detroit. Eight projects totaling 583,530 sf were under construction at the close of first quarter, with 50.3% pre-leased," Fenster says.

Auburn Hills had projects under construction totaling nearly 200,000 sf , the most of any submarket, he says.