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January 7, 2009 



We were hoping for a reprieve from Monday’s gloomy forecast, but were on hand yesterday as top Cushman & Wakefield execs delivered another reality check. Their quarterly overview?  New office leasing has hit a seven-year low. The good news: the breakfast briefing was still at Michael’s on West 55th, not McDonald’s.


Thank them at least for smiling. New York metro COO Joe Harbert and managing director Ken McCarthy tell us we're now seeing the real unemployment numbers as those on severance come off payrolls. We’ve lost all the jobs gained since ’06; of the 1.9M gone, 800k were office users. New office leasing activity totaled 19.1M SF, down 19% from ‘07 as tenants “wait and see” (seven of the year’s 10 largest leases were renewals). Overall vacancy rose from 5.7% to 8% during the same period. Asking rents declined from October through December and will continue to decline in ‘09; the sharpest was Midtown’s $5 PSF drop. And the $19.2B in investment sales over $10M was 60% lower than ‘07.


But congrats to C&W for starting the new year with a coup: It just signed an MOU with the U.S. EPA to address environmental issues in the commercial real estate industry, the first services firm to do so. C&W sustainability director Eleni Reed and EPA’s Andrew Bellina tell us that ‘09 will be spent promoting green practices in the firm’s corporate offices and properties under management. Amazing Fact: commercial building energy consumption accounts for 17% of greenhouse gas emissions.


Dennis Waggner, Andrew Peretz, Lori Albert, Gene Spiegelman, and Bob Gibson. No wonder retail gurus Gene and Bob have big smiles; their sector performed better than the office and investment markets, although it began to wind down from record highs in ‘08. Expect declines in consumer spending and tourism to affect the sector this year. Meanwhile, the group says it’s biding time in the slower market by cleaning houses, reducing cholesterol, and spending more time with family.


Downtown office vets Bob Constable and Richard Kennedy with Americas CEO John Santora. Like his orange juice, Richard’s outlook is half-full: he believes that president-elect Obama is on track to bring recovery, and feels optimistic about the steps being taken to help the economy.


We hope Q4’s numbers didn’t put a damper on Frank Liantonio’s spirits (left, with August DiRenzo and Mike Rotchford) after his recent return from skiing in Colorado. On the other hand, if they did, a great excuse to go back! (Folks, you have to look on the bright side.)

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Arent Fox
Reznick Group
Leo A Daly
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