Financial firms typically occupy a third of the office space in New York City's commercial and cultural center of Manhattan, according to real estate services firm Colliers International. Because the city's Independent Budget Office says such firms might lose 82,300 jobs between 2008 and 2011, office landlords must work hard to keep the tenants they have by offering inducements like reduced rents and renovated spaces, Chasanoff said. Rents have already fallen by 21 percent, said Barry Gosin, chief executive of real estate services company Newmark Knight Frank. He sees them falling between 30 percent and 35 percent from their recent peak of $64.13 per square foot in the second quarter of 2008 and said the percentage of space available for rent could rise to 13 percent from its most recent low of 8.1 percent in the third quarter of 2007. The turmoil at banks is bad news for real estate investment trusts (REITs) too. Citigroup is by far the biggest tenant of office REIT SL Green Realty Corp, generating 13.4 percent of its annual revenue, according to a UBS report published in September containing the most recent data available. About 84 percent of SL Green's portfolio is in Manhattan, UBS said. SL Green has the most exposure, but other REITs have big Manhattan holdings: about 38 percent at Brookfield Properties Corp, 35 percent at Boston Properties Inc and 30 percent at Vornado Realty Trust.
$4.22 (01/16/09)
