NEW YORK CITY-Over the past two years, the excess office space in New York City has been absorbed and the new space coming onto the market is being leased at prices significantly higher than during the recession. We are once again beginning to see rents in several of the markets climbing to prerecession levels—although it may be a few years before they reach their pre 2008 levels. The tightening of the office market is significant because it demonstrates the strong commitment the business and nonprofit sectors have and are continuing to make to New York.

The office market is the one true barometer of the future growth and prosperity of New York City. Unlike the residential market, which is always tight as a result of the structural shortage of housing that dates back over a century; the hotel market, which reflects New York as a tourist destination; and the retail market, which is based on global brands needing a flagship store in the city, the office market can only exist if the tenants want or need to be here. As the twenty first century began, there was a belief that the office market would suffer by a combination of the high costs of doing business in New York, corporate headquarters fleeing to the suburbs and other areas of the country, more employees telecommuting, and the contraction of corporate centers resulting from waves of mergers and acquisitions.

Then, in 2001, as the economy was going into recession and more and more office space became available, the terrorist attack took thousands of lives and ten million square feet of office space in one day, causing the office market to solidify. It also bought the market additional time to find its way in the "new" economy. Then the Great Recession hit, which was the test as to whether the office market would recover. The New York City economy recovered from the recession faster than almost any other region and now we see the demand for office space growing. Since most office leases are for at least twenty years, this is not a temporary situation; companies that are leasing space expect to stay.

To a large extent, this growth is being fueled by the belief that New York City is likely to continue to be a global center of business, entertainment, education and an incubator for new industries. This growing demand for office space also demonstrates that the American economy rebounding, which is apparent from the strength of the dollar and the insecurity of other economies and governments. Certainly there are problems in New York and the US, but there is a belief that they are manageable. One bright spot is Governor Cuomo's attempt to reduce taxes and bring down the cost of doing business in the state. This is in recognition that lower taxes will enable businesses to grow and hire more employees.

Stuart Saft is a partner at Holland & Knight. The views expressed in this column are the author's own.