He predicts in 24 months, Midtown rents will rise by $13 to $15 per sf. He expects the under-construction Bank of America building on Sixth Avenue will command rents of $100 plus per sf. "Demand is strong. There's going to be a significant rise in rental rates."
He also pointed out that there's a lot of activity in Midtown South. The story for next year could be, Grufferman said, is the squeezing out of small business in the Grand Central area who can no longer afford the increasing rents.
"Our forecast numbers were not bullish enough," said Bob Bach, the firm's national director, market analysis, regarding the national market. "2005 was one of the best years commercial real estate has had in a long time. The leasing market is stronger than we thought it would be and on the investment side demand gets stronger."
He said job growth is the demand driver. "Job creation had been anemic, but it's picked up powering demand." Bach called the industrial sector a "phenomenal story," pointing out that "tremendous imports are coming into the country." Hot spots for industrial include Exit 8A in northern New Jersey and the Inland Empire in California. "You can't build space fast enough. There's nothing stopping it. You can build all the way to Las Vegas if you want to."
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