For landlords, 2011 was a good year -- finally
April 16, 2012
By: Theresa Agovino
Owners of top-tier commercial buildings in midtown saw their net effective rents in 2011 increase for the first time in three years, according to a report by brokerage firm Studley. For owners of Class-A buildings downtown, net effective rents jumped for the first time in four years. ...
... In both cases, the reason for last year's big gains was that net effective rents were coming off a low base, said Daniel Horowitz, an executive vice president at Studley, which only represents tenants.
That's because the net effective rents dropped further during the recession than they rose during the boom years of 2006 and 2007. As a result, looked at over the span from 2006 to 2011, midtown landlords' net effective rents dropped 11% while they sank 25% downtown. ...
... Mr. Horowitz said that in recessions, some landlords may make no profit and consider it a win if they can just cover expenses.
Tenants, of course, fared well during landlords' lean years as building owners offered them months of free rent and big construction allowances to lure them to the space. ...
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