Whether or not these properties figure in the future space requirements for jumbo-sized office tenants remains to be seen, but Alexander emphasized that the current downsizing is not indicative of space needs down the road. In 2013 and 2014 CBRE predicts there will be rollovers on leases of 6.2 million square feet, or about 20% of the leased space the financial industry occupies. That means that planning for the future will start this year and next.

The investment sales market also experienced some downsizing in 2008, said William Shanahan, vice chairman of the investment properties institutional group. Forty-seven trades totaling $12.1 billion were transacted in '08, with nearly 60% of the total coming from forced sales such as the Macklowe/Deutsche Bank properties. That compares with 128 sales totaling $38.6 billion the year prior, and Q4 '08 was particularly quiet compared to the fourth quarter of previous years. However, Shanahan pointed out that the '08 total was still considerably larger than 2005's, "and '05 was considered a pretty successful year."

Nonetheless, the Q4 office numbers from CBRE and other firms chart a continuing decline. Manhattan overall saw December leasing activity of 720,000 square feet, compared to 2.26 million square feet in December '07. The availability rate rose to 11.3% at year's end, up from 7.9% a year earlier, according to CBRE.<pThe December report from Colliers ABR says Manhattan's class A vacancy rate closed December at 9.1%, up from 8.7% in November. Both direct and sublet availability climbed higher, up 3.6% and 5.8%, respectively, according to Colliers. "The rising amount of sublease space--and landlords with direct space attempting to compete with it-- has forced the average asking rent to drop sharply with the class A figure falling 6.7% in December to $75.96 per square foot," the report states.

The Colliers report does find some bright spots. "If you are a stable tenant with an upcoming lease expiration, this is nirvana," according to Colliers. "And if you are looking to buy a building for a long-term hold and happen to be one of the few out there with cash or an actual credit line, then this is your moment. But for owners and ownership representatives, business has dropped off sharply."

With that said, Alexander observed that liquidity is "slowly seeping back into the market." Six to eight months from now, the industry will start to see a backlog of investment sales transactions as pent-up demand comes to the fore.