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2009: 'One of the Most Challenging' for Office

NEW YORK CITY-Year-end market forecasts show vacancy continuing to rise, but there will be tenants with growing space needs.

By Paul Bubny | Updated on January 14, 2009

NEW YORK CITY-The year “2009 is shaping up to be one of the most challenging years that we’ve had in real estate over the past three decades,” Robert Alexander, chairman of CB Richard Ellis’ New York tri-state, region said on Wednesday. That in a nutshell was the assessment of CBRE in its year-end forecast report for the Manhattan office market–an assessment borne out by newly issued Q4 vacancy figures from CBRE and two other real estate service firms.

However, Alexander said Wednesday during a media presentation at CBRE’s offices, “We have great faith in the New York market.” In the long term, the financial services sector will be in growth mode again, even though the short term means more layoffs and up to 15 million square feet of space becoming available in ’09.

Much of that space will come from large-scale tenants that no longer exist as separate corporate entities, notably Lehman Brothers. The silver lining to the consolidation among financial services giants, Alexander said, is that some of these institutions will become larger and more powerful as a result.

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