Only tenants with lapsing leases and developers already in the ground appear to be cutting deals these days, while building owners are busy trying to keep lease rates from falling. Still, with overbuilding not the problem it was last time around, the mood is generally upbeat, as many industrial brokers predict a turnaround by the end of the year.

GlobeSt.com's Southwest bureau chief Connie Gore reports that the Texas industrial market is flexing its muscle as a strategically located hub, but deals still have been slow in coming. Prospective space takers, say the brokers, are jittery about the US economy and possible forced consolidations to hold onto profit margins. The Dallas-Ft. Worth region hasn't been hit like Austin, where sublease space seems to grow larger each day due to high-tech cuts. Still, the value-office or office-flex market in the state capital isn't as hard hit as class-A office, says Greg Johnson, vice president of leasing for Transwestern Commercial Services' Austin office.

Johnson says the prognosis for Austin is that "things will smooth out by the end of the year." In nearby San Antonio, everybody's talking about bringing new projects out of the ground, but there's been very little action, says John Turcotte, partner and industrial services director for San Antonio-based Reoc Partners Ltd. In 1999, 1.4 million sf had come on line and most of it's been absorbed, but the pipeline is practically dry right now for new supply, he says.