NYC Reinventing Itself Again

NEW YORK CITY-The city’s commercial real estate seems to have weathered a 24-month storm and is emerging from a rough period with demand for space fueled by positive job growth numbers in the past three quarters. And even in locations where office demand is “dampening,” the city is doing what it does best–reinventing itself, according to David Arena, chief strategy officer for the New York region for Jones Lang LaSalle.

Speaking at a seminar sponsored by FIABCI-USA New York Council, Fordham Real Estate Society and New York Commercial Real Estate Women’s Network, “Looking Toward 2005 and Beyond–New York and the Global Economy,” Arena pointed out that, even though the city has experienced job loss over the latest downturn, that loss was not as severe as the downturn in the early 1990s.

And things are looking up. In 2002, he said, there was 10 million sf of gross leasing activity compared to the 27 million sf projected for 2004. “This shows a continued confidence in the New York economy,” he added. Even in areas where activity is sluggish and vacancy rates are higher, owners and developers are finding ways to avoid empty buildings by turning to adaptive re-use. Specifically, according to Arena, owners and developers are combating the 12.5% vacancy rate Downtown by converting 11.5 million sf of office space to residential use–with more requests for conversions filing in everyday. They are also looking beyond residential to educational and retail use. For example, New York Law School took space at a 250,000-sf Broad/Wall site and the National Sports Museum inked a deal for 26 Broadway, he said.