Leasing is a delicate balance.

Commercial leasing experts around the city have become cautiously happy benches at the recent activity. They are busy, but find that most clients are already housed in city digs and are testing the waters for early renewal, expansion, consolidation of satellite spaces and newer surroundings.

Except for start-ups that are intrigued by Silicon Alley and are outgrowing their apartment offices out of town or out of state, there is no great corporate influx from the suburbs, but neither is there a concerted exodus from the city.

They see blocks of space over 150,000 square feet drying up, but plenty to offer clients in the under 50,000 square-foot range, both Midtown and Downtown.

For one such tenant, Williams Real Estate's Robert T. Tunis, a senior executive managing director, found around 42 initial units of space to show.

"On the first pass, when we became selective, there were 18 to 22 truly viable opportunities," Tunis said. "You are talking about buildings that are 85 to 90 percent rented and owners that know you will go to 21 other buildings."

Newmark & Company's William G. Cohen is currently showing three floors that comprise a 100,000 square-foot block of space at 260 Madison, "which is shown not less than every day," and a new to the market 250,000 square-foot block at 125 Park, which has had a dozen showings over the last two weeks for what will end up as a mid-$30's deal. "I'm talking to plenty of 50,000 square-foot tenants," he said.

Seeking 10,000 square feet for a different tenant, Tunis found even more opportunities available.

For the most part, a year's free rent is a thing of the past, work letters are smaller, escalations tighter and other non-rent variables are skimpy, so friendly clauses are tightening around cloutless tenants unless they are looking at areas where there is plenty of owner competition.

"There are specific pockets and deals that are stronger for the landlord's side than the tenant's," Tunis said. "But only because you have something so unique, by its size, location or quality, that it's a landlord's deal, but it's not a landlord's market."

Although the experts feel that certain tenants could drive new construction, the lease costs will have to be subsidized by city incentives, be tightly controlled, and pretty much match that of similar Class A available space that nearly meets their special needs.

"The space that will open up [when the large tenants vacate] is very viable space for reletting, so it's not a problem for anybody," said Cohen of Newmark, "but we have no sustained growth in employment. Without any growth period, there is no justification for new construction and it makes more sense to retrofit existing stock."

The idea of new buildings is exciting and intriguing, but many in the industry called for yellow lights and caution.

One new building might be plenty, two will tilt the market and three, they say, may mean a strike out for buildings left to tread water in an atmosphere of increasing vacancy rates.

And with known targets like Rockefeller Center West, a Durst/Klein Times Square tower and the ever present Ronson/al-Babitan site at 383 Madison all in play and all blooming to either nearly a million square feet or more, the cranes and new vacancies could still sprout at any moment.

"The game of hopscotch has to be watched," warned Bruce Mosler of the Galbreath Company. "If there is spec development and there are vacancies created behind, we can quickly go from a market as strong as the one we're in, to the one we left behind."

Those larger tenants that shopped around earlier, however, are finding the prime goods have been taken and are stepping up the urgency of their searches.

"I'm seeing a lot of activity with tenants who are perceiving the market is getting stronger," said A. Mitti Liebersohn, executive managing director of the Galbreath Company, "and those sitting on the sidelines looking to lock in."

But with powerhouse companies realizing their real estate costs are major additions to their bottom lines, others, like Reuters and Ziff-Davis, are carefully and slowly studying their alternatives and praying New York City will come up with some nice incentives to keep them from fleeing to greener pastures.

And each time a big looker is revealed, other "gorillas" start circling the space. "As soon as these blocks become available they are like lemmings from the sea," said Carol Nelson of Insignia/ESG, who is repping Ziff-Davis, Court TV, Blue Cross and others. "It's a very exciting time to do business - it's like a puzzle."

Over the last few weeks, industry insiders have identified tenants on the financial side including Royal Bank of Canada, Bank of Montreal, Morgan Stanley, Bear Stearns, Nat West and First Fidelity - which would be coming out of Boston; and advertising and publishing's Institutional Investor, Grey Advertising, and Olgilvy and Mather as all being in the marketplace seeking more than 100,000 square feet - and up.

Certainly, there are also whole buildings that could come into play when the full effects of the Chase/Chemical merger are revealed.

And Downtown, the step-child now of the major leasing market, will phase up the pace of its commercial attraction, particularly if the Real Estate Board of New York and the Alliance for Downtown New York succeed in getting better and more user-friendly commercial benefits.

"You will find the Downtown market will benefit because now that availabilities are there, the tenants are looking at a 50 percent discount for comparable space," said Jerry L. Cohen, vice chairman of Cushman & Wakefield.

Because of city incentives and low demand, Downtown renters can get into a top building for $25 a foot, and "it will make some of the companies make a commitment," predicted Cohen.

That's also, Cohen says, because owners like the Rudin's New York Information Technology Center at 55 Broad Street and the Alabama Retirement Systems glamorous 55 Water are making large financial commitments to the structures to make them technologically oriented, even while serving slightly different tenancies: 55 Broad with its Internet-driven 24-hour workers in the creative start-ups, and 55 Water with its overkill backup systems to serve the world economy's 24-hour financial service tenants.

"It's a fabulous thing for Downtown," said Jonathan L. Mechanic, a senior partner at Fried Frank Harris Shriver and Jacobson who is representing the ownership's interest in the group of deals ready to be penned at 55 Water, a 3.5 million square-foot monster with plenty of big blocks.

"People are getting nervous and want to get the deals done that have been moving along," he said. While before it was the owner, he says, now it is the tenant that is becoming more concerned that they get the deal signed "before the landlord changes the rate or takes a larger block."

To service smaller owners and buildings, the city and Alliance have teamed up with Plug and Go, wherein six more "B" type buildings - 55 John, 90 John, 111 John, 11 Broadway, 32 Broadway and 90 William owned by four different principals, are installing Internet connections and pre-building spaces for $15 leases.

REBNY and the Alliance have also released a report describing suggestions their joint task force developed to make the commercial Downtown building incentives as utilized as the residential ones. The recommendations are particularly targeted at smaller tenants that will end up with more money in their pockets to develop their companies and grow.

Already, William C. Rudin reports, a tiny tenant at 55 Broad has recently expanded to over 10,000 square feet.

Major tenant users are also studying buys along with leases, and almost every not-for-profit and foreign government is made knowledgeable about the benefits of commercial condominiums and their own lack of real estate tax advantages.

So Silverstein's Association Center at 120 Wall, a/k/a 95 Pine, can attract the National Urban League after its building at 500 East 62nd Street was sold; the Urban Justice Center and Community Access can buy condos at 666 Broadway; and 125 Broad Street can sell a condo to the ACLU, which sold its own Times Square site to the Dursts for the new 4 Times Square.

Overall, Tunis remarked, it's still unclear if there is a trend towards an owner's market. "Right now we have a condition," he explained. "We know where it was, and if it continues another year, then we probably have a trend, and we will have a landlord's market."