JOBS NOW, RECOVERY LATER

NYC employers hired 48k workers during the first half of the year, laying the foundation for office recovery. Despite the job gains, widespread improvement in operating fundamentals remains unlikely until next year, says Marcus & Millichap in its 2Q overview.
From the collapse of Lehman Brothers in September '08 through the end of '09, the city lost more than 173k positions, the firm reports. This year has seen a 28% recovery of those losses, compared with 16% nationwide. Despite this, tenants relinquished 28M SF of office space, while a considerable amount is leased but under-utilized and could hit the market in the coming quarters. As a result, the mild vacancy decrease in 2Q will likely give way to a late-year uptick, although declining sublet space will underpin softer rent cuts.

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