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Holliday's Office Forecast

New York
Holliday's Office Forecast
Manhattan’s largest commercial landlord has spoken: 2013’s office market looks optimistic (assuming the world makes it past Dec. 21). SL Green CEO Marc Holliday told a crowd of 530 during REBNY’s member luncheon yesterday that despite this year’s lukewarm market, his firm leased 4M SF—a record—and NYC saw 43,000 net private jobs created.
Marc Holliday, Peter Grant, and Gary Barnett
We snapped Marc and fellow panelist Extell Development prez Gary Barnett at the Hilton, flanking WSJ editor Peter Grant. Marc cited a jump in new inventory and tenant contraction and density for the slower year. “But 9% [vacancy] is still healthy,” he says. Short-term, it’s a pain for landlords, but in the long-term, it helps keep the city affordable. Gary says tenants don’t seem willing to pay what developers need to build a new office building with rents less than $100/SF. This has driven development to prime areas, Marc adds, although you can pull off sub-$100/SF rents for new buildings in areas like Downtown and the West Side, where land’s cheaper.
On the residential side, Gary says as long as the stock market stays strong, the sector will continue to do well. Both men say there’s good for NY in Obama’s reelection. “Very few states showed more support for him,” Marc points out—but the President’s response in upcoming months will be telling, with Sandy relief front and center. Discussion turned to the dangling crane boom at Extell’s One57 development during Sandy. Gary says it’s still under investigation, but he knows it was hit by a massive gust of wind. When asked if litigation would be involved, he quipped, “Everything in New York gets litigated.”