During a Wednesday media luncheon, Los Angeles-based CB Richard Ellis presented its April 2008 Manhattan MarketView Snapshot and pointed out that despite slowing rent growth, all three Manhattan markets achieved all-time monthly rent highs in March. Midtown rents remained the strongest of the three markets, with March asking rents at $85.61 per sf, up from $84.27 in February and $72.25 a year ago. Leasing inched up month-over-month, but was 3.9 million sf for first quarter 2008 compared to nearly three million sf first quarter 2007.

"We appear to have passed an inflection point, as the leasing market weakens, albeit at a gradual pace, due to the slowing US economy and turmoil in the financial markets" said John Powers, New York Tri-State Region chairman of CBRE, at the luncheon. "Manhattan should see rents begin to dip, but we do not expect a flood of sublease space to come on the market, as New York seems less affected by the recent job eliminations in the mortgage sector in southern California and the southwest. At the same time, most of Manhattan's landlords, especially REITs, appear to be well-positioned with low vacancy and strong balance sheets."

[IMGCAP(2)]Powers also spoke on capital markets, noting that "the credit crisis has made it much harder to obtain debt financing, especially on larger transactions where a consortium of lenders is required rather than the once robust CMBS market. Volume is down tremendously from last year's record high of $12.8 billion in the first quarter to $1.5 billion in first quarter 2008, but compares favorably with the $1.1 billion of Manhattan office sales in the same period of 2005 and the $2 billion in sales in 2006," he said.