"A lot of people are suffering from a perception gap," said Drew Conner,vice president of Boston Properties. "Some of the significant activityof 2001 is actually overhang from 2000." Meanwhile, Conner says,owners and tenants aren't finding each other. "It's like a juniorhigh cotillion with the boys on one side of the room and the girls onthe other. You know that they're going to get together and dance, butit's a matter of when."

"The market has gone from one extreme to the other," said Newmark &Co. president and CEO Jeff Gural. "At this time last year, my onlydecision was take one of the five or six tenants vying for the space.Now it takes a while to get an offer." Gural advises owners to makedeals with high-quality tenants. "When tenants are in arrears and needto renegotiate, that's the worst thing that can happen. Better to make adeal with a good-credit tenant."

"Are we heading into a downturn? Yes. Is there going to be pressure fromthe downside? Yes," said senior vice president of HSBC Bank GlennGrimaldi. As Jeff Gural pointed out, however, pressure from the downsidecould ultimately be good for this city. "It's good for the city ifrents come down. It's not good for the city if rents are too high.