The local upturn was set against the backdrop of improving numbers nationally, and Robert Bach, national director of market analysis for the Northbrook, IL-based firm, indicated that the national economic and real estate pictures are both showing subtle signs of life. "In the past six weeks," he said, "we've seen the biggest gain in GDP since 1983." He predicted that that the 10-year Treasury should end 2004 at 5%, and while interest rates will rise through the year, it was the general consensus that there should be no spike to upset the recovery's applecart.

How real estate will respond to a livelier economy is clear. Bach projected that office leasing, currently saddled with a 17.7% vacancy rate, will start to shore up in '04, ending the year at 17.3%. Industrial, currently posting a 9.8% vacancy, will hit year end '04 with a 9.1% rate.

Numbers were light in the retail arena, Bach noted that while "investors shunned the segment through the 1990s, it has held up reasonably well and has gone from worst to first." In terms of multifamily, "those investors who liked apartments in the '90s should love them over the next two decades." Obviously, rising interest rates will grease the skids leading to multifamily rentals.

On the local front, the economic revival is closing doors for tenants who've grown used to six months of free rent and $35 TI allowance, said executive managing director Howard S. Grufferman. "The notion that you could wait for a better deal is long gone," he stated.

Well, if not long gone, certainly going. Bob Bach predicted that leasing in the local market should tick up in the first half of '04 and rental rates will start to climb in the second half.