The U.S. economy and the stock market were both enjoying a Santa Claus rally as 2003 marched toward the finish line. The Gross Domestic Product (GDP) rose at an annualized rate of 8.2% in the third quarter — much higher than expected — which many economists say is a clear sign that a broad-based recovery is well under way.

“The good news is that the U.S economy is hitting on all cylinders, but we are seeing job growth lag more so than it has after previous recessions,” says Bob Bach, national director of research for Grubb & Ellis. If that trend continues, it could prove to be especially problematic for office and apartment owners, who have watched their net operating income slowly decline over the past few years amid tepid demand.

Still, there are signs the once moribund job market is coming to life. Non-farm employment rose by 137,000 in October followed by a smaller, but still encouraging, gain of 57,000 in November. Meanwhile, The Labor Department reported on Dec. 19 that the four-week average of initial jobless claims registered just shy of 362,000. That figure is significant because it's below the all-important threshold of 400,000, a level which economists say reflects an improving, or at least stable, job market.

But national statistics on employment, vacancy and rents don't tell the whole story or reveal the underlying causes. So, NREI set out to report on the state of the commercial real estate market on a region-by region basis.

The objective? Isolate the most compelling storyline in each region, from the impact of the financial services sector on the Northeastern office market, to the boom in shopping center development in the Midwest, to the growth of corporate headquarters and regional operations in the Southwest. In many ways, gauging the true state of the market is like piecing together a puzzle: together complete, but individually unique.