INSTABILITY IN THE FINANCIAL SECTOR:

As if Bear Stearns, Fannie Mae and Freddie Mac weren't badenough, last week the financial sector took a major hit as LehmanBrothers evaporated, the government was forced to bail out AIG andMerrill Lynch was absorbed into Bank of America in a deal worthbillions of dollars. Unsurprisingly, this week's poll respondentspredicted overwhelmingly (78%) that this would devastate the officemarket. A mere 22% don't believe this will have any effect at all.On the New Jersey side of the Hudson, there's much consternation,considering how much real estate these companies own and how manyof the state's residents they employ. Hal Messer, associate vicepresident with NAI James E. Hanson, thinks New Jersey will befeeling the effects of this for a long time. Here is what he has tosay:

"It's clearly going to hurt the leasing market, which I thinkwas slow to begin with because of the general economic conditionand the fact that companies were not making any decisions. LehmanBros has thousands of sf of space in New Jersey. I'm sure some ofit will stay now that Barclay's taking over at least a portion ofthe company, but there's going to be a ton of layoffs in Manhattan.That market's probably going to cool off, and whenever thathappens, people backfill into Manhattan.