"There has been a huge movement of capital into real estate, both debt and equity," he said. "A lot of it is a reaction to what is going on on Wall Street and investors' desires to own tangible assets that have real returns rather than a paper stock that may be out of business tomorrow."

Robert Weisz, chief executive officer of RPW Group of White Plains, agreed with Merin, stating that leasing is weak, while commercial investment is strong in Westchester and Fairfield counties.

RPW Group has been very active of late, acquiring 244 Westchester Ave., an 85,000-sf office building in Harrison, NY for $13.6 million and 300 Main St., a 96,000-sf office property in Stamford, CT. for $9.1 million.

He said that the current turbulent economy will cause leasing activity to remain soft for the next year or two. However, because there will not be any significant new construction in Westchester County for some time, office values will rise to between $200 to $250 per sf. within the next four years.

Weisz said that his firm is bullish on the Westchester-Connecticut market in the medium term, but noted that the region will suffer from lackluster leasing interest in 2003 and into 2004.

Steven Silverberg, vice president of Legg Mason Real Estate Services, noted that lenders are currently penalizing borrowers for vacancies and rewarding those who can show significant cash flow.

He said that his firm is seeing significant amounts of investment capital flowing into the market for a variety of commercial deals. He adds that a present, office and multi-family real estate properties are the products of choice for most investors.