WASHINGTON, DC-The unemployment rate dropped to 9.7% in January,according to the Department of Labor. Jobs grew in manufacturing; alarge gain was also registered in temporary help, which is viewed as aprecursor to permanent hiring. Services jobs did decline by 48,000–however that could have been a reflection of the temporary holidayseason hiring. Construction jobs also took a huge hit, due in some partto the weather but also as a reflection of the continued slump inhome building.

All told, more than 500,000 people returned to payrolls during themonth, bringing the unemployment rate to a five-month low, andsolidifying a perception that the unemployment downward spiral isending.

If that is the case then it bodes well for the commercial real estate industryacross all asset classes but particularly office. “Demand forcommercial real estate is a direct function of employment, so anyuptick in jobs will have a corresponding positive impact on themarket,” says Jones Lang LaSalle research director Scott Homa.

For markets such as the DC area, an uptick in employment could pushthe local economy to outperform the nation as a whole–especiallywhen coupled with ongoing federal hiring and spending, he says.”Office-intensive industry sectors, such as consulting, accounting,public relations and government affairs, have been showing robustgains due to trickle-down effects from federal spending. While we seecontinued headwinds for construction, retail and other consumer-drivenbusiness lines, those sectors that benefit from government spendingshould continue to flourish.”

“Today’s jobs numbers–as far as they go–are favorable for thecommercial real estate market, both in Manhattan, where I practice,and in other primary markets around the country,” Benjamin Kursman,transactional real estate attorney with law firm Herrick, Feinstein,tells GlobeSt.com. The numbers, which are still quite high, could also be viewed as asign the purge is over and healing has begun, he adds.

“We have already seen in New York absorption of subleased space and adecrease in corporate tenants looking to sublease their space, sothat layer of downward pressure on direct leases has begun to subside,” Kursman continues. “Couple that with a possibly better employment outlook, and the entirecommercial sector figures to be in better shape–assuming, ofcourse, that the employment outlook continues to improve.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.