UNCERTAIN HORIZON; THE DEAL SHEET

While Manhattan's office market is beginning to see some relief in fewer job losses and more confidence, two huge clouds loom:overestimating new jobs' positive impact on overall demand for space, and growing landlord instability caused by debt restructuring risk, warns CresaPartners in its Q1 report.
An hour ago, we snapped principals Marcus Rayner and Bob Stella in the firm's 100 Park Ave. offices. Much of the job creation will come from non-office using sectors like healthcare and education, so in order to stimulate office demand, more growth in financial services will be required, they say. Additionally, shadow space will absorb much of this job growth. And landlords who either acquired or refinanced their buildings between '05 and '07 are struggling to pay debt service based on today's rents; some transactions may be more complex and longer, so tenants need to be keenly aware of the landlord and lender situation in order to progress with meaningful negotiations.

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Related Topics: Bob Stella , Marcus Rayner
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