Silver linings are hard to find in today\u2019s dismal Manhattan market outlook, but local leaders from CB Richard Ellis Inc. found a few to point out today. In an earlier generation, the financial services sector thrived after the disappearance of one-time giants like Drexel Burnham Lambert and Solomon Brothers, noted Robert Alexander, chairman of CB Richard Ellis\u2019 tri-state region, at a briefing this morning. During the current restructuring of the finance industry, some 15 million square feet will return to the market, according to CBRE\u2019s projections. That will create considerable challenges for owners, but there may also be long-term benefits to massive rollups like JPMorgan Chase & Co.\u2019s acquisition of Merrill Lynch & Co. \u201cIf you can look at the silver lining . . . some financial institutions that are the anchor of New York are getting bigger and more secure,\u201d Alexander argued. Indeed, there are reasons to expect some noise from the financial services sector in the next year or two. In 2013 and 2014, 6.2 million square feet of office leases will roll among Manhattan\u2019s 15 biggest financial services tenants, Alexander pointed out. Those companies will have to start planning for the space needs in 2009 or 2010 in order to be ready in time. As for the space that will be returned to the market by the financial industry meltdown, there may be mitigating factors. Much of the space that financial firms are leaving tends to be in high-caliber, modern Class A buildings, which will make the product attractive to market to prospective tenants. \u201cIt\u2019s going to take a lot of elbow grease, but it certainly can be done,\u201d Alexander said. Alexander\u2019s perspective tempered findings about a disappointing 2008 and projections for an iffy 2009. Last year, office availability in Manhattan rose from 7.9 percent to 11.3 percent, CBRE found. The gap between asking rents and taking rents for Class A space in Midtown Manhattan–the city\u2019s largest office submarket–nearly tripled from 4.7 percent at the end of 2007 to 12.6 percent in 2008, and the gap will probably continue to grow. On the investment sales side, falling values will tend to keep most investors on the sidelines. \u201cIf you\u2019re an owner and you don\u2019t have to sell this year, you\u2019re not going to,\u201d said William Shanahan, vice chairman for CBRE\u2019s investment properties group. The financing gap will continue to place a drag on investment sales as well; last year, seller financing and assumed debt accounted for 62 percent of the $12.1 billion of closed sales in Manhattan. \u201cWe expect [that percentage] to go up this year,\u201d Shanahan said. One hopeful sign in the investment arena is a modest return of liquidity to the market as banks start lending to one another. That trend will eventually generate momentum once the investment market thaws.<\/p>\n","protected":false},"excerpt":{"rendered":"
Silver linings are hard to find in today\u2019s dismal Manhattan market outlook, but local leaders from CB Richard Ellis Inc. found a few to point out today. In an earlier generation, the financial services sector thrived after the disappearance of one-time giants like Drexel Burnham Lambert and Solomon Brothers, noted Robert Alexander, chairman of CB…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1003930735","post","type-post","status-publish","format-standard","hentry","category-regions"],"acf":[],"yoast_head":"\n