CBRE also brokered six of the top 10 office leases on the year-end CoStar list, and arranged four of the top 25 investment sales across the five boroughs, as compiled by Real Capital Analytics. Matthew Van Buren, executive managing director at CBRE, chalks up his firm's strong showing to its market share, its track record and the "industry icons" it numbers among its roster, including Mary Ann Tighe, CEO of the New York tristate region, and Stephen Siegel, global chairman.
To Van Buren, '09 was "a tale of two years." The first few months of '09 were in many respects a continuation of the uncertainty that cast a pall over the market in the latter part of 2008. "You saw a lot of very short-term deals getting done," he tells GlobeSt.com.
As the year went on, though, "the major sectors—financial services, law firms, etc.—returned to normal term in their leases, sometimes even going longer-term than before," Van Buren says. One of the key factors driving this surge of activity was that owners and tenants reached "agreement" on what space should go for. It was a lack of certainty about pricing that kept the deals from getting done in the first part of the year, he says.
Some of the year's big deals were undertaken by tenants seizing the pricing opportunity, which Van Buren says is "bouncing along the bottom now." In other cases, tenants realized that with decade-old leases set to roll, "they needed to do something" and the low rents provided an additional spur.
A more upbeat view of the future was ultimately the deciding factor in the surge of activity. "Regardless of pricing, for any level of leasing velocity to return, tenants had to be able to answer 'yes' to the questions of 'will your company be around in 10 years?' and 'do you have an idea of what you're going to look like from an employment perspective?'" says Van Buren.
Especially among larger tenants, the current leasing cycle is still marked by "a real orientation toward preservation of capital," Van Buren says. The next stage, he says, will be marked by tenants' greater willingness to invest in build-outs and new space.
As for the brokerage community's outlook, Van Buren says "there's still a lot of velocity remaining in the pipeline," although he sees "waxing and waning of confidence in the economy." However, he adds, "if the economy keeps chugging along at the present rate, the velocity will hold up" as 2010 progresses.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
