Manhattan In Limbo
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|Yesterday, we grabbed a seat at Michael's on W. 55th alongside topCushman & Wakefield execs for the firm's Q3 breakfast briefing; definitely beats standing in a breadline. Metro New York COO Joe Harbert and economist Ken McCarthy valiantly tried to answer the hovering question: how low can numbers go? Unfortunately, looks like we'll have to wait until at least Q4 numbers to find out for sure. They argued current difficulties appear to be within the range ofnormal cycles, but said that in New York, statistics lag reality.|
|Ken and Joe report Manhattan's vacancy rate has hit a two-year high: 7.4%, with Midtown, Midtown South and Downtown all charting increases year-over-year. Available sublease space increased 72%—the biggest jump in nearly four years, thanks toM&A activity and restructurings. Overall, all three submarkets recorded a negative 2.9M SF in absorption, compared to 468k in '07. Rising rental rates have also flattened out, while leasing activity has slowed by 14.4% since this time last year, the lowest YTD since 2003. Investment sales over $10M have fallen 55% as a result of sparse credit. So, doc, what's the good news?|
|Midtown vet Josh Kuriloff contends this is a cyclical, healthy market cleansing that will last six to 12 months. Of course, optimism is easier when you just repped Macquarie Group's 260k SF lease renewal and expansion (160k SF increase) at 125 West 55th St. —congrats.Colleagues Bob Constable and Dale Schlather didn't give their predictions, but they maintained better poker faces.|
|CEO of the Americas John Santora with Ken and Midtown office vice chair Mitch Konsker. Ken tells us he's been pulling late nights recently, not just to monitor the markets but to keep up with the Red Sox. John also has a full plate: In addition to working with Cushman'sAsian operations, his son's wedding is at the end of the month.|
|Midtown EVP Jon Serko and Midtown/Downtown office head Suzy Reingold are both busy, but Suzy as usual is taking some time to rideher thoroughbreds.|