"New York and Boston were among the best performing citiesduring the recession," according to the report. "Clearly, thefederal efforts to support the financial system had the desiredimpact: the economy did not collapse and the banking systemsurvived." As a result, the report says, the 7.2% decline infinancial services employment was less than the drops inprofessional business services, retail and information: 8.2%, 7.5%and 9.8%, respectively.

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The top three cities in terms of financial services employmentare New York City at 11.8% of total employment, Boston at 11.2% andDallas at 8.8%. All three were among the top seven lowest job-losscities, says C&W.

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Boston and New York also rank high in education and healthservices employment, coming in second and third, respectively,behind Philadelphia. Again, cities with large numbers of jobs inthese areas withstood the recession better than most.

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However, it's not always a case of a rising tide lifting allboats. Washington, DC benefited from the 0.4% increase nationwidein government employment since the recession began, and C&Wsays the nation's capital experienced the smallest job loss of anyof the 18 major metropolitan areas the report surveyed. On theother hand, Los Angeles, which also has a high concentration ofgovernment jobs, was among the metro areas most affected by thedownturn.

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That has partly to do with the fact that L.A. is also among thecities with the biggest percentage of manufacturing jobs. Thesector was hit hard by the recession, C&W says.

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The report notes that "this recession did not hit all realestate markets equally." While some saw very little change invacancy and rents, those that others experienced large decreases inemployment or increases in supply tended to suffer "huge increases"in vacancy. Miami and Phoenix, for example, saw vacancies rise to19.6% and 23.4%, respectively, in the face of major upticks inunemployment.

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C&W predicts a gradual increase in office occupancy once therecovery gets under way. "Those cities that experienced moderateemployment declines have the best potential for growth," the reportstates. "Such markets have weathered the storm remarkably well andare ready to expand as the economy comes back. Cities with largelosses that generally have less diverse economies and heavyconcentrations in manufacturing and construction are likely to havemore difficulty achieving consistent declines in vacancy."

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Overall, real estate markets nationwide are faring better thanmight have been expected, "given the sharpest decline in employmentin more than 70 years," C&W says. The national vacancy rate isbelow the last peak in 2003 and well below the level of the early1990s.

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"This performance suggests that markets will emerge from thisrecession in better shape than in either '03 or the '90s," thereport states. "Conditions in the US are being mirrored elsewherein the Americas, though the US felt this recession more than inother regions."

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.