This new construction wasn't forecast to have a major impact on increasing supply even before the destruction of the World Trade Center towers. Of the eight new buildings now under construction in Midtown, 87% of the 7.6 million sf currently being built is already pre-leased according to Grubb & Ellis. Preliminary site work now underway at three other Midtown projects will one day produce another 3.7 million feet, but 70% of that space is already spoken for, leaving only about one million sf of new space from those three projects available to meet demand.

"A huge part of the space that is under construction is already committed," says Ray O'Keefe, executive managing director and regional managing director of Grubb & Ellis. "There are only three million to four million sf available. While some may view the building that is underway as speculative, it's not, because most often there are tenants committed."

Four of the ongoing construction projects, totaling 4.2 million sf, are already fully leased. They are 383 Madison Ave., being developed by Sterling/Hines/Fred Wilpon; One Rockefeller Plaza West, developed by the Rockefeller Group/Tishman; 5 Times Square, by Boston Properties; and 1745 Broadway, Park Imperial, developed by Boston Properties.