Although Persichetti acknowledges that "one quarter doesn't make a trend," Q1 results suggest that "the market appears to be turning. That isn't a bad thing, if you think about it, because we're at 25-year vacancy lows and all-time highs in asking rents. However, vacancies are starting to tick up as well, and as that happens, tenants will have more options."

As reported on GlobeSt.com, SL Green CEO Marc Holliday in a recent earnings call said the REIT's performance "was very good in the first quarter, especially when viewed against the backdrop of the challenging economic environment and the continuing illiquidity in the credit markets." Despite the strong quarterly leasing performance, Holliday added, "We do, however, stand by our previous statement that we believe the leasing market will soften as a result of the lack of financial services firms' participation." He estimated that net effective rents could drop by 10% to 15% from their peak levels. In addition, he said, "there could be some widening of free rent to give some tenants relief from the sticker shock that they might feel when they roll over from the old rents to today's market rents."

During the call, SL Green's president and CIO, Andrew Mathias, said that office building sales in Manhattan "slowed significantly in the quarter as a standoff developed between buyers and sellers and a lack of financing continued to make it difficult to get deals done." He added that there were some notable exceptions during the quarter, with several properties selling at prices that "demonstrated the continued willingness of buyers to still pay sub-5% going-in cap rates for quality assets that have a strong mark-to-market story."