Office leasing experts debate if NYC at bottom
Two of the top Manhattan office leasing brokers said rents had further to fall on a panel yesterday, but Newmark Knight Frank CEO Barry Gosin took a different stance.
Robert Freedman, executive chairman of FirstService Williams said the market needed another 12 to 14 months before hitting bottom, and large sublease blocks needed to be absorbed first. Peter Turchin, executive vice president at CB Richard Ellis, said it might be another year before prices would pick up.
But Gosin said following the fastest price discovery he had ever seen, leasing values are about at the bottom.
“Usually I am the bear in the group, this is hilarious,” Gosin said. “I think prices are pretty well established and I think we are bumping along the bottom. I don’t think there is a significant decline left in the market.”
The roundtable discussion also included Peter Riguardi, president of Jones Lang LaSalle, and Paul Massey, CEO of Massey Knakal Realty Services, and was part of a series of four panels hosted by Schein Media and NYInc Magazine yesterday morning in Midtown.
Several speakers noted the shift to leasing smaller spaces. Turchin said most of the demand currently is from small tenants, many looking for pre-built space.
Riguardi said a fundamental change in the economy tied to smaller financial shops will impact leasing prices. He said the large firms were shedding workers who were starting smaller shops, who then earn less money.
“They are eating what they kill, and that is going to change the dynamic of office needs,” he said.
Freedman added to Riguardi’s point: “The rental structure will probably have to reflect that economic reality.”