The Manhattan Sublease market continues to dry up, with current sublease availabilities at a two year low. The decline in sublease space is in part a result of leases simply expiring over time and in part a result of major corporations taking back the sublease space they had listed earlier, in the expectation that with job growth they will need the space once again.

Signs of economic recovery abound as evidenced by the third-quarter GDP growth of 7.2 percent, the resurgence of M&A deals, and an improving IPO market. If the stock market remains healthy, the M&A and IPO activity should lead to increasing profits for Wall Street, with potential employment gains not far behind.

If the economy continues to improve and the commercial real estate market tightens, prices will undoubtedly rise. There however remains a narrow window of opportunity within which to take advantage of the historically low rents and landlord incentives to recast leases by extending, expanding or relocating.

The education and medical sectors are still active and growing. Law firms are making major commitments and small and medium sized businesses are exploring their long term alternatives. For example, The Legal Aid Society signed a long-term lease for 134,560 square feet at 199 Water Street. While there are still great deals to be had landlords are trying to remove soft dollars in terms of free rent and work.

The building sales market remains robust. After last months purchase of the GM building, many other major building are being considered for sale. One recently announcement: Thor Equities LLC purchase of 321 West 44th Street for $35 million or $172 per square foot.