Friday, April 11, 2008

The news from Manhattan

I have to take a quick vacation break to relate this story to you from the Big Apple.

Could the news be better? Yes, because leasing activity is down in the last quarter, roughly 10% from the same time last year. And vacancies are up, from 5.7% to 6.1%.

The news here to me is that things are not a whole lot worse. Maybe things need to catch up? Maybe the latest casualties are not priced in? Ummm....well....or maybe the market is not all that gosh-awful. For instance:

Cushman & Wakefield said that in the first quarter, overall rents jumped more than 25% to $67.13 a square foot from the year ago period. Mr. Harbert says even though the economy is weakening and overall vacancy rates are increasing, vacancies have not risen to the point where landlords feel compelled to lower their rents. However, he notes that they are giving more free rent and more generous construction allowances.
Uh huh. Read that again. Now could this be the calm before the storm? Maybe. But it is just as likely a sign that landlords are simple not willing to push the panic button.

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