"The flight to quality has already happened," Peter Korpacz, director of the global strategic real-estate research group at PricewaterhouseCoopers tells GlobeSt.com. "What is pushing activity now is institutions like pension funds that need to pay dividends and use low-risk investments to do so. Overall, there are a lot of institutional-type players out there looking for the best assets and all are going after the same top-grade properties.

"There are 10 to 15 buyers looking at each one of these properties. It's gotten so competitive that you're seeing pre-emptive strikes, where investors are knocking on doors to try and buy properties before they hit market." According a recently released PricewaterhouseCoopers investor survey, some of the best performing class A properties during Q1 2002 include Houston, Manhattan, Midtown & Midtown South, Washington, DC and Seattle.

"A competitive market for high-end properties to me is the beginning of a recovery," says Korpacz." "As the demand starts to spread out as the economy returns, the industry will begin to come back as a whole. The only issue is whether this continued economic slump is going to be a long-term trend or a short-term bubble."