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Q3: Slow, But Steady

New York
Q3: Slow, But Steady
Cushman & Wakefield's Brad Mendelson, Ken McCarthy, and Andrew Peretz
After a good run for the first five months of the year, there's been a slowdown in improvement, says Cushman & Wakefield NY Metro Region Research managing director Ken McCarthy (center, with C&W's Brad Mendelson and Andy Peretz) yesterday morning at Michael's during the firm's quarterly media breakfast. But there's still good news: We lost more jobs in the previous two recessions on a percentage basis, and even though office-user job growth has been flat, NY has replaced those jobs more rapidly than the overall US. Almost half of all job growth here has been from tourism, he points out. (We assume this means chiropractors for neck's sprained while looking up.) New leasing activity rose 65.8% for the first nine months of '10 compared to the same period in '09, at 18.8M SF.
Cushman & Wakefield's Josh Kuriloff, Joseph Harbert, and Suzy Reingold
Despite this growth, the overall vacancy rate was up slightly to 10.9% due to the addition of 2M SF to the market, approximately 1.5M SF of that related to Goldman Sachs' relocation to its new HQ, noted NY Metro Region COO Joe Harbert (center, with C&W's Josh Kuriloff and Suzy Reingold). Retail also continued to strengthen over 3Q, with availability in SoHo decreasing from 9.9% to 9%, thanks to retailers like Converse committing to the submarket. The Upper West Side saw a significant dip, from 8.5% to 5.7%, while upper Fifth and Madison Avenues both saw increases in availability and rents. Overall Manhattan investment sales were even better, activity was up 168% through the first nine months, for a total of $9.4B. This level of activity suggests that investors have taken note of improving market fundamentals and have identified Manhattan as a primary investment target, Joe says.