2001: An (office) space odyssey.
The panel agreed that, prior to Sept. 11, the market was clearly slowing down with failing dot-coms pushing vacancy rates up throughout the city. With sublease space on the rise, it was inevitable--though counter intuitive at the time--that after Sept. 11 the market would be flooded with it.
Participants included Richard T. Anderson, president of the New York Building Congress, Stephen Estroff, attorney from Jenkens & Gilchrist Parker Chapin LLP, Mark Jaccom, executive vice president of Julien J. Studley Inc., Steven Swerdlow, president of CB Richard Ellis' eastern division, and Carl Weisbrod, president of the Alliance for Downtown New York, Inc.
The first few months of 2001 saw a "gradual erosion" in vacancy rates according to Swerdlow.
"But on Sept. 11 we saw a quantum decline," he said.
Weisbrod characterized the market before Sept. 14 as being "in a disconnect," because so many companies had excess space.
"Many companies are waiting to go downtown once the incentives package is released," he said.
All of the panelists agreed that an incentives package is urgent, if not over due already.
Jaccom said that the rift between what downtown tenants want to do--and can do--is vast.
"Psychologically, these tenants want to leave. But they can't just break their leases. A lot of us are saying to them, 'stay tuned,"' he said.
Anderson stressed the importance of doing the right thing downtown, which includes moving forward quickly nd respectfully.
"This will be one of the most visited sites in the world. It has to be designed with that in mind. It also has to support lower Manhattan and the city," he said.
The one panelist from the legal profession added that ownership rights could make the future of this site a slippery slope.
"You have the Port Authority's position and the tenant's position. There is a lease, and these issues have to be resolved," said Estroff.
The overriding theme of the discussion was lower Manhattan, its future and what must be done-soon-to get it back on its feet. At the end of the talk, all were asked to predict what 2002 would bring this city's real estate industry. It wasn't-as in past years-a question that people jumped to answer.
"I'll just say that I think 2002 will be a hell of a lot better than 2001," said Weisbrod.
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|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Jan 30, 2002|
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