"Announcements by several investment and commercial banking firms have fundamentally altered the landscape of Wall Street," says James Delmonte, VP and director of research for Jones Lang LaSalle, in a release announcing the firm's Q3 report. "While the long-term effects of the sweeping changes in the financial sector are difficult to assess, there will be a significant impact on Manhattan's office market." Grubb & Ellis' Richard Persichetti sees the beginning of an office downturn that will last two to three years, while Cushman & Wakefield's Joseph Harbert predicts a tenant's market in the making. By contrast, CB Richard Ellis' newly released report on supply and demand says the Manhattan office sector's inherent strength will sustain it, and the impact on asking rents will be modest.

[IMGCAP(2)]"I don't see 150% of Moody's projections hitting the market at bargain rents," Stephen Siegel, CBRE chairman of global brokerage, said Wednesday at a breakfast presentation. Siegel was referring to the Moody's Economy.com forecast of 97,000 layoffs in Manhattan, a figure that CBRE used in its report as the middle ground of three layoff scenarios. The "high layoff case" of 145,500 office-using job losses represents 150% of the Moody's estimate, and would put more than 18 million sf of space back on the market and lead to a 25% drop in asking rents.

[IMGCAP(3)]Siegel described himself as "a cautious optimist" and pointed to the Manhattan market's still-vigorous leasing activity, including the Macquarie Group's 260,000-sf renewal and expansion earlier this week. "The perception is that this market is dead and dying, and that's not true," said Siegel.