Last Wednesday evening, I was chatting with an investment bankerneighbor about the financial markets travail. He wondered aloudabout the future of Bear Stearns: "What's the point, what are theyoffering that their stronger competitors can do much better?" Hesaid he didn't see them surviving. And he mentioned some other highprofile names that he thought weren't too secure either.
In fact, by Friday Bear was on life support and only because ofan unprecedented Fed move to shore up some of their bad securities,akin to hooking up a feeding tube and respirator to someone withoutinsurance to pay at the emergency room. And in fact Bear's days arenumbered with Sunday's announcement of a JP Morgan takeover. JamieDimon, a proven M&A surgeon, will take the parts and peoplethat may add some value and amputate the rest.
And so what happens to that massive Bear headquarters on MadisonAvenue near Grand Central? A more than nice building -- it's triplemint. It will fill back up with that great location. Maybe JPM willmove into it and leave some of its nearby digs. But here we go, thelooming Wall Street debacle starts to impact the stalwart Manhattanoffice market. The Street starts to slim down and reconfigure andthat only means rising vacancy rates in America's most importantoffice center. And how's that hedge fund guy you know doing in his$100 per square foot space?
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