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NEW YORK CITY-Last week Mayor Giuliani announced the city gained 7,800 new private sector jobs in November, furthering its position as leading American city for job growth. Giuliani stated, “This news further shows that New York City’s economic renaissance continues and has shown no signs of slowing down.” Despite looming fears of a recession, leasing activity continues to outpace last year in the office market, reflecting job growth and the city’s overall economy.

According to Insignia/ESG’s December 2000 Office Market Review, available space “dropped to approximately half over the past year to 3.5% in Midtown and 4.3% Downtown and declined slightly to 5.3% in Midtown South, despite several new subleases that surfaced.” The report also found that average asking rents “rose to yet another all-time high Downtown, bounced back in Midtown from October’s slight decline to within $0.61 of the all-time high and dipped slightly in Midtown South.” The Financial District is still the hottest sub market with 77% of Downtown’s leasing and the same percentage of this segment’s net absorption.

“For those looking for signs that the sky is falling, they’re not here,” Joseph R. Harbert, COO of Insignia/ESG’s New York region writes in a statement accompanying the release of the report. “The numbers show that the market is strong and solid.”

Times Square continues to be a hot sub market with a number of new projects for office space in the works already and also in the planning stages. For example, Boston Properties earlier this month announced it had officially completed the acquisition of 100% of the leasehold interest and ground rent credits for the site on the south side of 42nd Street between 6th Avenue and Broadway. Times Square Tower will be constructed on the site, bought for $164 million in cash from The Prudential Insurance Company of America. Boston Properties is already building 5 Times Square, which is already 100% leased to Ernst & Young.

With deals such as Forbes’ lease of 60,520 sf at 90 Fifth Ave., neighborhoods such as Chelsea, traditionally known as a primarily residential area, are seeing more office action in this tight market. In November, the Grand Central sub market remained the strongest with almost 900,000 sf of transactions taking place.

Cushman & Wakefield this fall released its forecast for 2001, predicting vacancies to increase in Midtown, representing “a frictional increase” rather than a softening market. Midtown South will continue to grow as a solid market and Downtown rental asking rates are likely to continue to rise, according to the forecast. The C&W report reflects a continued confidence in the office market in the city.

In fact every industry expert with whom GlobeSt.com has spoken about the office market as the year comes to a close has expressed concerns about the economy, but continued confidence in the city’s office market. The limited amount of space, continued job growth, surpassing national figures, expansion of existing space for growing companies and the prestige associated with many addresses here, will continue to fuel the market, according to insiders.

To further seal the Big Apple’s position, many point to the official signing of a deal between the New York Stock Exchange and the city and state last week. The Exchange will have a new, modern trading complex on Wall Street, which will receive more then $600 million in subsidies.

The block, bounded by Wall, Broad and William Streets, as well as Exchange Place, will become home to a 10-story trading complex with a 1.3 million sf office tower on top. The city has agreed to acquire the site from Rockrose Development Corp., which owns the apartment building at 45 Wall Street, and J. P. Morgan, which owns the rest of the block, by June 30, 2001. The city has also agreed to have the complex and office tower completed by 2005.

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