As the financial crisis dethrones scores of kings of the universe, swank Midtown Manhattan offices will be a lot easier to come by.
So far, about 10,000 financial services jobs have been lost in New York alone as hedge funds fade into the night, real estate firms quietly trim their staffs and investment management businesses cut employees. The number of financial services sector unemployed in New York is expected to swell to 35,000, noted Ken McCarthy, managing director of Cushman & Wakefield Inc., a New York real estate firm. I think thats a reasonable number. Clearly were adding space to the market if you add in other businesses such as advertising and media firms, Mr. McCarthy said. Clearly space will have to come back on the market.
The office vacancy rate in New York was 7.4% at the end of the third quarter, up 0.2% from the prior quarter, Mr. McCarthy said. I wouldnt be surprised if its double digits by early next year, he added.
More companies are subleasing extra space. About 23% of the office space in New York has been re-leased, up from 18% this time last year, he noted.
Its not dramatic yet, but the tell-tale significance is that space is coming back.
New York will not be alone. Mr. McCarthy said other large central business center cities such as San Francisco and Boston also will have more swank addresses available for lease. Arleen Jacobius