Ever-changing rules muddy the market.

The commercial leasing rules of the last few years, though unbalanced, have been perfectly clear: What landlords wanted, landlords got. Though tenants were almost completely at the mercy of property owners, the consistency and clarity offered an odd sense of comfort all around.

Now that the economy has slowed and the demand for space has softened, the rules, though slightly more balanced, have become murky: Leases are being negotiated, not dictated, and it's unclear who holds the stronger cards. Even though the process may be more balanced -- and tenants would say fairer -- the shift has left both sides with a vague sense of discomfort.

In Westchester, Long Island and southern Connecticut, property owners are mulling which historical backdrop to use when deciding how far to bend to make a deal: the most recent history of the last half-decade, when they dictated terms with impunity, or the early Nineties, when they couldn't give space away. Probably, the most reasonable answer is that today's market lies somewhere in the middle, although arguably closer to our recent past.

Our overall economy -- nationally and regionally -- and the commercial real estate market are far stronger today than in the late Eighties and early Nineties. It's true that demand has eased somewhat, and may ease further if massive layoffs ensue. But there is so little new product that the supply side of the equation figures to remain stagnant. And here's the counterintuitive kicker: the worse the economy gets, the tighter commercial space may get because the capital markets will not finance new construction. Countering that, of course, is that layoffs and office consolidations will lead to more sublease opportunities, which will loosen the market.

With all these competing variables, it's easy to see why owners and tenants are uncertain about how aggressive to get in leasing negotiations. Today's market appears historically analogous to that of 1988, when a previously hot market began to cool. Many property owners -- looking wistfully at the high rents and low vacancies of 1987 -- walked away from deals that were not quite as rich, and then regretted their intransigence a year later, when the market cooled even further. The job of identifying the shifting variables -- and weighing the worth of each -- falls to property owners, corporate tenants, and real estate professionals. Those who do it best -- using history only as a general guide, not as a pinpoint barometer of where we are or as a predictor of where the market is headed -- will fare best.

History can offer only general guidelines on how the commercial real estate market might be have, but it cannot dictate the thoughts and action of landlords or tenants. The most savvy, flexible -- and yes, reasonable -- business people will survive and may be even prosper, regardless of where the market takes us. The one thing we know for sure is that there will be leasing activity, because about 14 percent of the office market rolls over each year. This built-in activity means that in Fairfield County, for instance, between 5 million and 6 million of the 40 million square feet will roll over, with zero absorption. The question is, at what terms?

I believe that the shifts inure slightly to the benefit of tenants. From their perspective, market conditions could not be any worse now than they were over the last several years. Sublease opportunities, less competition for available space, and the overall lessened velocity of deal-making should outweigh -- slightly -- the overall lack of space and the probability that little new space will be coming to market anytime soon.

My advice to property owners is this: Move to make the deal. In times of economic uncertainty, get your buildings leased, and keep them leased. Err on the side of caution, and be willing to move to the low side of the market box, just as you were willing to move to the high side of the market box when prospective tenants were competing for your space. Don't look wistfully to last August as a guide to how you should make deals this May. Don't panic, either, and let tenants pick you clean as if we're headed into a market that is entirely pro-tenant, because I strongly doubt that we are based on supply. And be more diligent than ever about providing good service, because in a softening market and a resulting flight to quality, you will be judged not just as a commodity provider, but also subjectively as the provider of services.

My advice to tenants is this: Don't try to make up for years of market imbalances all at once. Realize that you have a bit more latitude in terms of what you put on the table and get in return. Don't get cocky' and blow the deal, because there aren't that many alternatives out there. Remember that you need a place to do business, and there is such a thing as being too shrewd -- if you outfox yourself and lose out on an appropriate space, you'll probably overpay to do a short-term, stopgap deal. If you find a space that meets your needs, negotiate reasonable terms and make the deal. Consider a sublease, because sublessors are often more motivated to make a deal than landlords are; landlords are concerned about an asset's overall value, which is determined by the rent roll, while sublessors simply want to cut their losses and transfer space.