"There is a real tension in the market," says C&W executive managing director Tim Welch. "The leasing market is relatively weak because of the amount of available sublease space, layoffs and the slow economy. Conversely, there is a tremendous amount of capital available for real estate investment."

There is a reason for this excess of capital. The relative strength of real estate as an investment vehicle has made it a good alternative to the stocks and bonds markets, which can bring low returns and be volatile. Welch says that REITS have consistently outperformed the Dow and the Standard & Poors 500 over the past 12 to 15 months.

Reynolds Haas of C&W reports that very few properties on the market in the Puget Sound region are of interest to institutional investors. "Subsequently, we see very aggressive bidding for the properties that meet their underwriting objectives," he notes.