When we were looking for office space 2 summers ago, the market in midtown was tight as a drum. My partner Kevin and I each said we were likely top ticking the real estate market, but we really had no choice.(At least we can trade up to bigger space in out buildings)

From tomorrow’s NYT:

Last year, when the New York real estate market was still frothy, large blocks of office space were hard to come by. Not anymore.

Almost 16 million square feet is currently listed as available in large blocks in 68 office buildings in Manhattan, according to Colliers ABR, a commercial brokerage firm. That is nearly double the space available a year ago, both in terms of the number of large office blocks — which in New York usually means 100,000 square feet or more — and in terms of total square feet.

Those figures are widely expected to go much higher.

Given the collapse on Wall Street, and the massive layoffs, there will be a lot of extra space coming to market soon.

Some good advice for tenants? Shop around:

“Tenants might do better by shopping the sublet market rather than trying to renegotiate a better rent with their current landlords. “A lot of landlords are still in denial,” Mr. Colacino said, “but the sublease space is priced realistically for the actual market conditions.”

But the picture could become much starker next year. Among large office blocks that brokers expect to hit the market, Mr. Sammons estimates that the financial industry will account for roughly one-third of the new space coming on the market in Midtown and more than half of the new space downtown.

The Deflation trade continues . . .

>

Source:
In Manhattan, a Flood of Available Office Space
J. ALEX TARQUINIO
NYT, December 2, 2008 SQUARE FEET
Changes roiling the financial industry have contributed to a doubling of the listings of large office blocks.

Category: Economy, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Manhattan Awash in Office Space”

  1. TrickStar says:

    Gee, don’t commercial real estate guys have to pay monthly mortgages?

    They don’t use significant amounts of leverage to purchase those buildings, do they?

    And they won’t be relying on rent checks to service that debt, will they?

    We could never expect an implosion of the commercial real estate market, could we?

  2. Winston Munn says:

    Not to worry, Bubba, we be in capable hands:

    Washington Post
    Thursday, October 27, 2005

    “Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

    U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president’s Council of Economic Advisers, in testimony to Congress’s Joint Economic Committee. But these increases, he said, “largely reflect strong economic fundamentals,” such as strong growth in jobs, incomes and the number of new households.”

    I’m beginning to get the sinking feeling that our Ship of State shouldn’t be trying to cross the Atlantic in winter….

  3. ben22 says:

    BR,

    Not that it’s really comparable but the same thing is going on here in Wilmington DE.

  4. BR,

    these contemporaneous posts are nice, and all, but when does TBP start looking fwd:, into what’s coming down the pipe?

  5. rww says:

    The future is too scary. It’s sitting right there for everyone to see now and nobody wants to look.

  6. drudru says:

    This is so obvious. That retail analyst on Bloomberg video (Davidowitz?) did a great job describing how bad it is going to get.

    This should be good for SRS. I read that this ETF is specifically short Commercial RE.

  7. TrickStar says:

    I’m long BOT – that’s the 3x levered ETF that tracks any and all businesses that get bailed out.

    Doh! What a great idea.

  8. Mannwich says:

    I keep trying to find a reason why SRS is NOT a good play now and probably well into ’09. It just seems so obvious, which makes me very suspicious. Now how can the Feds screw me up on that trade? Any0ne have any answers?

    I’ve been going to this well quite a bit over the last few weeks and am trying find reason why I shouldn’t go back to it.

  9. 10 cc says:

    Here in Central Jersey, about the only new commercial buildings finished in the last two years that are occupied were built for a specific tenant (drug, hotel, grocery chains etc.). There are many office or retail space buildings apparently built “on spec” that have been sitting empty for well over a year; not even a “Coming Soon” sign to be seen.

  10. Andy Tabbo says:

    Some off topic technicals for tomorrow’s trading for any of the swing/day traders out there…and I know you’re out there.

    I see two key areas of resistance for tomorrow:

    851.73-855.74 as a=c targets and 50% retracement, respectively
    871.70-872.31 as 1.618*a=c target and 70.7% retracement, respectively.

    Pretty tight alignments. We actually hit 850.54 near the close today so perhaps this little “b” wave completed on the close. If the market does beat a retreat from either of these levels, then look out. We could be in store for a leg down very similar to what we saw on Monday.

    Daredevil aggressive traders should be selling into these R1 and R2 levels with a stop above 880…don’t want to see a decisive break of 880. I see clear sailing higher if we can breach that level.

    Best of Luck,

    -AT

  11. AGG says:

    The year is 2008. So what, exactly, do you need an office for anyway? You can always add bathrooms and parking spots around your house. Zoning laws? Forget about enforcement in today’s climate. How many clients really need to be physically present for you to service them? How much of it is ego? Can you get high speed internet in your house? Then you don’t need an office. However, office affairs are much harder to pull off with a home office. Yeah, I know it’s boring but if you want a certain thing associated with work, admit it and stop beating around the bush. Human relations always require a bit of hypocracy but our western civilization life AND business model is self destructing. Try something new and more efficient. You can’t possibly make it worse than the status quo does.

  12. Bob A says:

    check out downtown Seattle dude.

    home of the Bank formerly known as Washington Mutual

    great place long as you don’t care if the sun’s ever out