The Real Deal New York

From the August issue: Bureaucrats may soon find that their bureaus are just a little bit smaller.
As the city, state and federal governments tighten their belts, brokers are seeing them reduce the amount of office space they lease. And with several prominent government agencies studying ways to reduce their footprints further, some insiders are beginning to worry about the impact that those cuts are going to have on Manhattan’s commercial leasing market.
The uncertainty extends to some nonprofit organizations that depend on government funding, commercial agents said.
As of June 30, government, education and social services accounted for 7.6 percent of office space usage in Manhattan and 11.8 percent of new leasing, according to Cushman & Wakefield. While the numbers were largely stable from a year earlier, both the city and state are cutting jobs, and big tenants like the Metropolitan Transportation Authority are involved in high-profile consolidation efforts.
Brokers say government agencies are now putting every square foot in their portfolios under a magnifying glass. [more]