It is hard to believe that a person who I had considered one of the pessimists on the state of the office market, Barry Gosin, the president of Newmark Knight Frank, has become the optimist on the New York City office market.
Last Friday, Barry appeared on CNBC, stating that he thinks that office rents have reached bottom.
“We are calling a bottom,” he said. “Our view is that the rents have priced forward, that values have come down significantly, and that sometime this year, prices will start to turn.”
Unfortunately, I would consider myself cautiously optimistic on the state of the office market and have therefore reached out to some other real estate leaders to provide me with their thoughts (read: more realistic) on the state of the market.
Joseph Harbert, the COO of the New York metro region at Cushman & Wakefield, believes “we haven’t reached bottom, but further declines should be minimal — maybe another 5 percent to go.”
Downtown, he said, “expect further rent declines as space comes to market. We have started to see some deals in the $20s [per square foot], although Class A office space is expected to remain above $30 a foot. In Midtown, Class A rents have experienced the greatest decline and are approaching a bottom in the next three to six months. So saying we are close to the bottom would be the most accurate way to put it.” … [more]