According to a Jones Lang LaSalle forecast, looking at thesituation with Lehman and depending upon if all or none of thespace is added to the market, if there is 100% of disposition,roughly 2.7 million sf will be added to the market resulting in apotential Q1 '09 midtown class A vacancy rate of 12.1%. Theforecast already assumes more than 15,000 in job losses prior torecent announcements. If there is a 75% disposition, a little morethan two million sf will be added to the market resulting in apotential vacancy rate of 11.7%. If there is 50% of disposition,about 1.3 million sf will be added to the market leading to avacancy rate of 11.3%. If there is 25%, roughly 673,345 sf will beadded to the market, pushing a potential vacancy rate to 10.8%.
Hugh Finnegan, an attorney in the real estate group at Sullivan& Worcester LLP, tells GlobeSt.com that the result of financialindustry failure in Manhattan will most definitely have an effecton the office leasing market here. "The leasing market willsoften," he says. "There will be a lot vacancies created whereverLehman has large chunks of space." Merrill Lynch reportedly hasapproximately 60,000 employees, and Lehman has more than 20,000.Finnegan says that as for the firm's 32-story Midtown officebuilding--said to be worth north of $1 billion--"is valuable, evenif vacant, so I doubt there will be a foreclosure."
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
