Reports that JPMorgan Chase's acquisition of Bear Stearns could put hundreds of thousands of sf on the market followed just a few days after Marcus & Millichap Real Estate Investment Services forecast a growth of 16,000 jobs citywide in 2008. "In normal circumstances, we'd be talking about net gain in job growth," says Edward Jordan, regional manager of Marcus & Millichap's Manhattan office. "On the other hand, if you look at some of the layoffs and consolidations that have been planned, there could very likely be another 2.5 million to three million sf of space available for sublet this year that not had not been anticipated."

Already this year, the availability rate in the Manhattan office market had risen slightly from 8.2% in January to 8.4% in February, with nearly 1 million sf added, according to the monthly market snapshot from Newmark Knight Frank. Along with freeing up large blocks of Midtown space, the Bear Stearns deal could jeopardize JPMorgan's plans to build a tower for its investment banking group on the site of the former Deutsche Bank building at 130 Liberty St. Instead, JPMorgan announced it would move the group into the Bear Stearns building at 383 Madison Ave.

Neil Goldmacher, executive vice president and principal at Newmark Knight Frank, says JPMorgan hasn't walked away from the site at 130 Liberty. "They consider it valuable expansion space," he says. Goldmacher adds, however, that the company is under no obligation to build at 130 Liberty, and "There would have to be a heck of an economic recovery to get them to build down there at this point."