NAI James E. Hanson's Messer

INSTABILITY IN THE FINANCIAL SECTOR:

As if Bear Stearns, Fannie Mae and Freddie Mac weren’t bad enough, last week the financial sector took a major hit as Lehman Brothers evaporated, the government was forced to bail out AIG and Merrill Lynch was absorbed into Bank of America in a deal worth billions of dollars. Unsurprisingly, this week’s poll respondents predicted overwhelmingly (78%) that this would devastate the office market. A mere 22% don’t believe this will have any effect at all. On the New Jersey side of the Hudson, there’s much consternation, considering how much real estate these companies own and how many of the state’s residents they employ. Hal Messer, associate vice president with NAI James E. Hanson, thinks New Jersey will be feeling the effects of this for a long time. Here is what he has to say:

“It’s clearly going to hurt the leasing market, which I think was slow to begin with because of the general economic condition and the fact that companies were not making any decisions. Lehman Bros has thousands of sf of space in New Jersey. I’m sure some of it will stay now that Barclay’s taking over at least a portion of the company, but there’s going to be a ton of layoffs in Manhattan. That market’s probably going to cool off, and whenever that happens, people backfill into Manhattan.