market research

October 2008

October 2008 New York Commercial Real Estate Market Report

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Last month, nine hundred thousand square feet came back on the market with millions of square feet to follow as Lehman Brothers, AIG, Merryl Lynch put additional back on the market. Asking rents are being reduced and landlord concession packages are increasing, yielding a 10 to 15% net effective rent reduction. Still major firms are putting off major lease decisions until they determine their future size and needs and holding out as long as they can to get the best price possible.

New York Market Overview

  • Total Manhattan Class A Office vacancies stayed at 6.0 % vacant
  • Total New York City Office vacancy decreased from 5.9 % vacant to 5.7 % vacant
Real estate executives are expecting an additional 20 million square feet of surplus office to hit the market as Wall Street employees lose their jobs in addition to the announced Bank of America's takeover of Merrill Lynch, Lehman Brothers' bankruptcy and an unsure future for American International Group. That may lead rents, which have already declined 10 to 15 percent, to decrease.

The market has been showing a decline in taking rents, the bottom line after price negotiations and accounting for concessions, the summer months may have brought the first of a surge in owners their published asking rents is slowly creeping up in Manhattan, though as a whole the market here is still seeing an increase.
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