According to its latest numbers, overall the vacancy rate in Manhattan at the end of 2002 was 12%, compared to the last recession (1989-1992) when vacancies ranged from 16.8% to 18.5%. However, "ultimately we're trying to get down to 8% or 9% vacancies," explained Maria Sicola, senior managing director of C&W.
Sicola added that asking rents continued to hold their own in '02, finishing the year at $42.96 per sf, an increase from the levels seen in 1998 and 1999. In addition, total leasing activity measured 20.8 million sf, a surge from 18.9 million sf in 2001.
However, she warned there are still a few dangers on the horizon--specifically, shadow space continues to be NYC's wild card. Sicola estimates that amount of un-marketed available space could account for another three to eight million sf in Midtown alone. "This is something we need to keep a close on eye on," she said, adding the majority of this space is in the banking and securities sectors.
Another factor yet to be absorbed is the recent 18.5% hike in NYC property taxes. According to C&W, this could raise prices, for both tenants and landlords, by $3 to $4 per sf.
Numbers weren't the only thing discussed, however, C&W kicked off its event with opening remarks from its president of US operations Bruce Mosler, who suggested improved transportation was the key to rebuilding Lower Manhattan. "The governor and the mayor must name a Downtown rebuilding czar who will make improving transportation the first order of business in New York," Mosler said.
The event was then rounded-out by keynote addresses from NY State Attorney General Eliot Spitzer and Cantor Fitzgerald LP chairman and CEO Howard W. Lutnick.
Spitzer focused his remarks on corporate governance, and the need for US firms to bring down the "imperial CEO" by restoring a system of checks and balances that includes lawyers, bankers, accountants, and boards of directors. He concluded by saying despite the recent troubles on Wall St., "the government will make sure we don't lose our place as the nation's financial capital."
Lutnick, who guided Cantor Fitzgerald through the Sept. 11 disaster that killed 685 of its employees, discussed the lessons learned from surviving two terrorist attacks (both 9/11 and the 1993 WTC bombing). After the '93 attack, "we started to think about what we would do if we lost the building again," he said, adding Cantor ultimately set up a back-up system that allowed for all its information to be accessed from branch locations.
He also touched on the ongoing negotiations regarding a possible relocation to the former Bradlees store site on 14th Street, but noted it was still "working out arrangements with the city and state." Currently the firm occupies temporary space at 57th St. and Lexington Avenue. In addition, he admitted the firm was not interested in returning to whatever office space is eventually rebuilt at the former World Trade Center site, nor would it ever occupy space on top floors of a city skyscraper.
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