Lower Manhattan diverse enough to withstand job losses

By Sara Polsky | September 25, 2008 06:50PM

The downtown real estate market will not be devastated by financial
sector job losses, despite the fact that the top three firms occupying
office space downtown are the three former titans of Wall Street —
Merrill Lynch, AIG, and Goldman Sachs — according to a panel of real
estate experts at today’s annual RealShare New York conference.

The panel said it expects Lower Manhattan’s growth to continue because
of the area’s diverse group of tenants and developments slated for
completion when the economy strengthens again.

Lower Manhattan is much more diverse today than it was 10 or 15 years
ago, when 52 percent of the area’s real estate was occupied by
financial sector institutions, said Sheldon Cohen, senior managing
director at CB Richard Ellis, who moderated the panel on how the
financial sector job losses will affect the downtown market. In
Manhattan overall, financial firms lease about 30 percent of existing office space, Crain’s reported.

“Lower Manhattan is finally what we were all looking for it to be — a 24-hour community,” said Steven Spinola, president of the Real Estate
Board of New York. Karen Bellantoni, executive vice president at Robert
K. Futterman & Associates, added that the downtown community has a
wider range of real estate needs, including space for high-end
retailers who are attracted to Lower Manhattan because of the presence
of other luxury retailers.

The panelists did acknowledge the uncertain impact of financial sector job losses on downtown real estate.

Merrill Lynch, AIG, and Goldman Sachs occupy 4.2 million, 4 million,
and 3 million square feet of office space, respectively, in Lower

“It’s too early to really have any clarity on what’s going to happen”
to financial firms’ downtown office space after the purchase of
Merrill, the takeover of AIG, and the movement of Goldman to new
headquarters, said William Rudin, president of development company
Rudin Management Company. “We’ve known the financial services industry
has a rollercoaster effect” on downtown real estate.

Right now, said Joshua Zamir, managing principal at private real estate
equity firm Capstone Equities, “people are a little slower making
decisions” in Lower Manhattan, “but it’s not dead.”