Brokers see light at end of tunnel.

The New York City office market is playing into a previous pattern of recovery, Robert Alexander, one of CB Richard Ellis's chief New York executives, said on a panel at a Bisnow breakfast last week.

The privileged perch enjoyed by top real estate brokers has the tendency to infuse their outlook with optimism.

But the black depths of the leasing downturn in recent months have managed to take the wind out of even the most die-hard Pollyannas.

At one point towards the end of the breakfast, the usually sunny Alexander briefly fumed about the federal government's decision last September to let Lehman Brothers enter into a spectacular and catastrophic collapse. "Where the hell were they for Lehman Brothers," Alexander asked, before admitting that he was biased.

"They were my biggest client," said the broad shouldered broker, whose nickname "Big" denotes his physical size as well as his firm's repute that he transacts more leasing business than any other broker.

"They were my biggest client, too," said Mark Shapiro, a real estate attorney with the firm Orrick, Herrington & Sutcliffe LLP, who was the moderator.

Jones Lang LaSalle's New York area president Peter Riguardi, who along with Bob Friedman, the chairman of the real estate services firm First Service Williams, was also on the panel, injected a dose of pragmatism that was not also without some sympathy.

"I had Stan O'Neill going to the board to build a building at the Pennsylvania Hotel," he said, referring to the blockbuster deal that almost was to have Merrill Lynch anchor a massive new tower across from Penn Station. "At least the fed put a stop to the freefall in the marketplace."

Still, the crux of Alexander's comments came in his reiteration of the promising market data CBRE has carefully been compiling over the summer and has not been shy in promulgating as evidence that the market's darkest hours have likely passed.

Year to date, the city's two biggest space-taking industries, financial companies and law firms, have signed 2.1 million square feet and 1.4 million square feet of leases in midtown respectively. In 2006, a "high water" mark in leasing Alexander said, those totals measured 7.8 million square feet and three million square feet.

But starting in June, things picked up. Financial services did 300,000 s/f of deals that month, then 500,000 s/f in July and 400,000 s/f in August Alexander said. Law firms took 330,000 s/f, 430,000 s/f and 220,000 s/f in the same period.

"Compare that to 150,000 s/f leasing on average in midtown up to June for financial firms and 60,000 per month for law firms," Alexander said. "We're encouraged by that."

The activity so far hasn't nearly been enough to stave off the amount of space that has been coming available in the form of expiring leases and space being offered for sublease. Net absorption was a brutal negative 9.6 million square feet in 2008 and is so far at negative 6.6 million square feet this year Alexander.

But Alexander said the stark data fits the mold cast during the last market downturn, between 2001 and 2003, when the market gave up 8.8 million square feet in year one and 5 million in year three before rebounding into positive numbers again in 2004. Based on that arch, Alexander predicted a "further diminution" in 2010, but a tightening market by 2011.

"The market is active, we're swamped with activity, but it's not to be fooled with a correction," Riguardi warned. Still, Riguardi was happy to dip into the oft-repeated attributes that are thought of as the irrepressible, undeniable anchors of a Manhattan comeback; that the best and the brightest want to be here and that when they get laid off, they're entrepreneurial and talented enough to go out and reinvent themselves and the city's economy.

In 2006, Riguardi said, there were 15 or 20 major financial firms taking space compared to 50 or 60 firms a quarter of a century' ago. With so many financial service professionals cast off in that industry's tumult, Riguardi envisioned a return to a much denser field.

"You'd be surprised," Riguardi said. "Mid-tier firms and firms you never heard of are taking advantage of the talent out there."

Bob Friedman concurred. First Service Williams, he said, was in the process of helping a 3,500 s/f private equity firm expand into 25,000 s/f. "They're in acquisition mode," he said.

Riguardi said that he is working to find 130,000 s/f for a "premiere firm" and that the rent "will have a fine number in front of it."

Things are even brewing in what has been a persistently moribund commercial sales market, according to the panelists.

Referring to Jones Lang LaSalle's marketing of the midtown office tower 452 Fifth Avenue for HSBC, Alexander said, "We're all hopeful JLL will pull off the sale," before adding that his firm was "active as well" with a midtown asset.

Alexander was most likely referring to a stake in 299 Park Avenue being auctioned by CBRE for the Swiss bank UBS, which owns the interest and has a large lease in the tower. We "have issued a sales contract," he revealed.

Riguardi only said that "mostly foreign buyers" had shown up for the sale of 452 Fifth Avenue, which has been going on in fits and starts for months. It is widely rumored that building is being purchased by the investor Joseph Cayre on behalf of investors in the Middle East.