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Studley: Market is solid.

Concessions, concessions, and concessions was Julien J. Studley's verdict on the tri-state market's future, should the economic slowdown continue for a while.

"I think what will happen depends very much on the economy, but there's no question that while the prices haven't changed that much in the past few months, the attitudes have changed," said the president of Julien J. Studley Inc., one of the pioneers in the production of real estate market reports. "What I mean is that the landlords no longer have three or four tenants who are fighting for the space. It's a more open market, people actually sit down to negotiate now."

According to the company's 2001 New York City StudleyReport, availability rates in Downtown and Midtown Manhattan increased by more than a percentage point in the first quarter of the year - not a welcome news for the owners.

At the same time, however, Studley believes that the economy may yet pick up, preventing the rent rates from going down.

"I am not Allan Greenspan, so you can't ask me about what the economy will do, but I think certainly in the past few weeks, there have been indicators that we are at the end of the recession, in which case the rents will pick up," he said. "But it's a little tricky to talk about the market simply in terms of the rents. You have to talk about the package and the package changes continuously."

Studley himself handles tenant representation, so he doesn't think that a slight downturn would be such a terrible thing.

"This is the only business which is always looked upon from the point of view of the supplier, not the consumer," he said. "But I think that there are advantages for the owners when the market goes up and for the tenants when the market goes down. The point is, eight months ago people would not talk about anything because another tenant would come in and offer a higher rental. But now you can talk again, you can negotiate."

But the news is better for the owners when it comes to New Jersey. According to the report, "The market is positioned for stability in the upcoming months.

The state's diverse tenant base - including pharmaceutical, financial services firms, telecommunications, and high-technology companies - should also help to insulate the region from isolated incidents of corporate downsizing and uneven economy."

So even in the worst of cases, New Jersey will remain strong.

"There isn't as much competition for space as there was before because the tech firm and the big companies have been restructuring," Studley said.

"But it will kind of remain where it is now."

While slowing demand and new sublease space caused average availabilities in most markets to increase slightly in the first quarter of 2001, rates were genrally still lower than those recorded a year ago.

[Graph omitted]
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Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 
Article Details
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Author:MISONZHNIK, ELAINE
Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1USA
Date:May 9, 2001
Words:477
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