The wobbly credit market has also triggered thousands of layoffs in the finance sector that could easily dilute occupancy demand in coming months. As the city's key economic engine shifts into lower gear, Manhattan office landlords' winning streak may be nearing an end.
Here are some recent developments behind the growing uncertainty:
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Through Oct. 19 of this year, roughly 42,205 financial services job cuts were announced in New York City, reports Chicago-based Challenger, Gray & Christmas. Just 8,000 cutbacks were reported during 2006.
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In mid-October, Manhattan-based investment bank Merrill Lynch posted $7.9 billion in third-quarter writedowns associated with subprime mortgages and asset-backed bonds. It was the bank's first quarterly loss since 2001.
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Class-A leasing absorption during the first nine months of 2007 totaled 18.3 million sq. ft., down from 20.7 million sq. ft. during the same period in 2006, reports Manhattan-based real estate services firm Cushman & Wakefield.
“The office sales market has really cooled off since the earlier part of the year,” says Bob Stella, senior vice president at Manhattan-based tenant representation firm Cresa Partners.
“And I don't expect the fourth quarter to be very active on the leasing side either. I suspect that many finance firms will drag their feet until the credit markets really improve.”
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source: nreionline.com
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