Q4 Numbers Bring the Downturn Home

NEW YORK CITY-The impact of the recession is translating into higher office vacancy rates and lower asking rents across Manhattan, with the drop-offs steepening in Q4, according to year-end reports. Investment sales activity in 2008 was off dramatically from 2007′s record highs, a decline especially apparent in the last three months of the year.

“Since last time we spoke, things have deteriorated dramatically” in the US economy, Ken McCarthy, Cushman & Wakefield’s managing director for the New York area, told reporters at the company’s quarterly media event held Tuesday. While office-using employment represents 21% of all US jobs, it has accounted for 40% of the layoffs nationwide over the past several months. “This is very much a white-collar recession,” McCarthy said.

Locally, that has meant vacancy rate increases well into the double digits. Jones Lang LaSalle puts Manhattan’s overall vacancy rate at 10.2% for Q4, up 43% from a year earlier and the highest since 2004. C&W’s Q4 report puts the island’s office vacancy rate at 8%, but does use the 43% figure to describe the year-over-year increase in available space.