Jeff Lyon, CEO and president of Kidder Mathews & Segner, said his company produced over $1 billion in transaction volume last year — a record year in all market segments for the brokerage.

Lyon attributed the record to the huge demand for office space, created in part by dot-coms with high growth expectations.

At one point last year, firms were scrambling so hard to find office space in downtown Seattle that “if they didn’t take it by that morning or that afternoon, it was gone,” Lyon said.

That is not the case today. Lyon said companies are looking at what’s available and are finding more choices. “We have seen a continual and very positive level of activity,” he said. “There are people looking for new space. We are cautiously optimistic.”

And, unlike the frenzied market seen last year, this year is more orderly. Lyon said clients are now taking longer to make decisions and evaluate their choices, while brokers have to market again and show the benefits of a particular location.

“It will be interesting to see what happens this year because there are a lot of successful brokers that have never seen a slowdown,” Lyon said. “This economy has been growing for the past 10 years.”

Lyon said leasing rates for mainline tenants will remain steady, while sublease space could get cheaper because tenants looking to sublease are increasingly concerned about cash flow. He expects more focus on tenants’ financial strengths and negotiating leases.

“I think there are some very interesting dynamics going on that we haven’t seen in the last five years,” Lyon said.

Another factor nipping at the heels of the real estate market is the ballooning cost of energy. Lyon said several telecom projects have been slowed or canceled entirely due to the inability to guarantee power to the sites. A number of warehouses that were going to be converted to telecom use are now going back to their intended purpose. Lyon said a good thing that came out of the Internet boom was the advent of Web-based systems that allow consumers to access information that enhances real estate decisions. He said initial hype that the systems were going to change how the real estate industry does business didn’t hold true — brokers are still needed to decipher information and apply it.

Last year’s hot market allowed Kidder to expand its sales force by 10 brokers to a total of 82. Lyon said the firm still plans to fill some positions this year, including a few more brokers and specialists in property management and valuation services.

Lyon said his firm is adjusting to a slower real estate market by bringing clients value through its broad base of experience. “People have real estate problems in an up market as well as a down market,” he said.

Kidder operates offices in downtown Seattle, Bellevue, south Seattle and Tacoma.