NYC Office Leases Lowest Since 2009 on Wall Street Cuts
March 23, 2012
By: David M. Levitt

Manhattan office leasing in the first quarter is poised to be the lowest in almost three years as Wall Street cut jobs and needed less space, according to preliminary data from brokerage Studley Inc.

Agreements will be signed for the rental of about 5.7 million square feet (530,000 square meters) this year through March, according to New York-based Studley’s projection. That’s the smallest three-month tally since the 4.5 million square feet leased in the second quarter of 2009, months after the credit crisis pushed Lehman Brothers Holdings Inc. (LEHMQ) into bankruptcy and froze demand for space in the biggest U.S. office market. ...

... “As the saying has gone for many years, as financial services goes, so does New York City,” Mitchell Steir, Studley’s chief executive officer, said in a telephone interview.

Growing information technology and media firms have kept the market from sliding further, Steir said. He cited rising demand from such companies as Google Inc. (GOOG), which bought 111 Eighth Ave. in Manhattan’s Chelsea section in 2010. ...

... Steir of Studley called the leasing slowdown “a healthy digestive period” following a recovery that threatened to get too heated. He said he would be more concerned if the pace of leasing had continued, “because it started to get a little too silly too quickly.” ...

... This year’s biggest lease so far is Bank of America Corp.’s renewal of 345,000 square feet at 114 W. 47th St., according to Studley, which specializes in representing tenants. ...

... Creative industries -- communications, business services, fashion, advertising, information technology and education -- have averaged 42 percent more leasing annually since 2007 than financial services, according to a Studley analysis. From 2000 to 2006, financial services out-leased creative companies by 19 percent. ...

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