NEW YORK CITY-Leasing velocity and investment sales alike may beup, but the New York City office market will have to wait until atleast 2011 to see a sustained improvement in fundamentals, saysMarcus & Millichap Real Estate Investment Services. At the sametime, opportunistic investors may find some bargains in thedistressed arena, although by no means a glut.

In Manhattan alone, “more than $6 billion in office propertiesare near to or in default or special servicing,” according to asecond-quarter New York City office report issued Thursday. Theassets that fall into that category cut across class and location,notes Ross Mezzo, associate VP of investments with Marcus &Millichap’s New York office.

The properties that sold between 2005 and 2007, generallyconsidered the “hot spot” for highly leveraged CMBS deals, “weren’tjust class A trophies,” Mezzo tells GlobeSt.com. “Anything in agood location was selling: mid-block, Garment Center, MidtownSouth. As a result, the specter of loans coming due iswidespread.