A new estimate from the state Department of Labor puts the possible
Job Cuts On Wall Street at nearly double the previous estimates.
In an interview with Reuters, James Brown, a market analyst for the state agency, predicted that Wall Street would lay off a stunning 36,000
employees — one fifth of its entire work force. That compares
to the 20,000 that the city’s Independent Budget Office predicted in
The bleaker outlook would not only put a damper on the city’s economy,
but it could also hinder
Manhattan’s commercial leasing market in the coming year.
If the cuts come to pass, Manhattan could see up to 9 million square
feet of office space, direct and subleasing, dumped back on the
market, according to James Delmonte, vice president and director of
research at Jones Lang LaSalle. To get to that figure, Delmonte
estimates an addition of 200 to 250 square feet for every employee.
If that space does, in fact, get reintroduced to the market, the
vacancy rate would climb to about 9.7 percent, from its current level
of 7.9 percent. The figure is above the 9 percent threshold where
asking rents begin to fall, according to Delmonte.
He points out, however, that 9.7 percent is still slightly below the
vacancy that Manhattan saw in 2002 and 2003, and that the market will
fare better this time around.
“Back in 2001 and 2002 there were several factors that impacted the
market: troubles in the financial services, a correction in the
technology sector, as well as September 11th,” Delmonte said.