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Wall Street rebounded at the end of the week, but the commercial and residential real estate markets are getting ready for financial sector fallout. The NY Sun reported that Bank of America's acquisition of Merrill Lynch may mean another 4.2 million square feet of office space on the block. Still, brokers and the city are relieved that Barclays is taking Lehman's 7th Avenue office and the feds saved AIG, as they make up 6.2 million square feet. On the residential side, the Real Deal suggests landlords may offer more concessions, like out-of-state guarantors on top of free month's rent and owner-paid commissions. One rental firm said a landlord "called and asked me how many of our tenants work for Lehman Brothers."
Volatile Economy Could Mean Lower Rents, More Concessions
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Lower rents..... yeah sure.
I assume that by "real estate market" we're only talking about Manhattan.
You mean that 1.7 million dollar condo is now only 1.5 mil? And that $3500 a month one-bedroom rental in the village is now $3200? My God, do you know that that means!?
For me, not a darn thing.
Events like these have a trickle down effect. Its only a matter of time before it effects the region as a whole.
Will that $800k 2 bedoom condo downtown brooklyn now cost $500k?
I'm all for that!
Not looking good for future ground zero tenancy.
I don't think recession-related vacancies at the "Freedom Tower" will be an issue. Its forgotten that many floors of the WTC were unoccupied years after it opened. If a building is in a relevant location, the space will eventually be filled once the economy improves.
The more scary question is this: who's willing to bet Lower Manhattan will still be the financial capital of the world in 20 years?
On the residential side, the Real Deal suggests landlords may offer more concessions
The operative word here is "may." Ain't gonna happen.
Businesses should start looking at other cities to operate in. Manhattan has become one expensive corporate park. It's nonsensical to keep so many administrative employees in NYC.
the ultra-rich don't worry bout this. they're probably thinking of buying an adjacent unit as an addition.
""The more scary question is this: who's willing to bet Lower Manhattan will still be the financial capital of the world in 20 years?""
Are you joking? NYC already lost the status of being the financial capital of the world in the past 20 days!!
But F-UCK Wall street & the rest of the 1 percenters . The only people crying for them are Yacht builders, Champagne bottlers, Luxury Condo builders, and Jewelry stores.
funny you mentioned yacht builders, I know a guy who moved from Buffalo to work for a yacht builder in Florida and he said business and the pay is good.
don't know bout now, though. how many yachts does a billionaire need?
Yes! Because the only people who work downtown are the ones making $150k+ with 50k bonuses a year.
Stop acting as if this is the fall of Wall Street. If Wall Street can survive the great depression, it will certainly survive this. And who cares if its still considered the financial capital of the world or not. Its all emotional competitive babble. Both cities are unique in their own ways, and no one stays number 1 forever.
Keep in mind London was a financial capital long before Manhattan was even on the map.
I'll believe it when I see it.
Lower rents? mmmm...so, that would be about 3,800/month, down from $4000/month. The only people who benefit from this are still the rich.
lets say a $1600 1bed goes down to $1400, thats a huge difference.
but I live in brooklyn so whatevs.
how many yachts does a billionaire need?
Depends on the billionaire. But if you're keeping up with the Joneses, you must at least have two -- one for each coast. Can't waste valuable time sending your only yacht through the Panama Canal for a vacation in the other ocean, you know. And you can't keep bragging rights with your three-year-old 150 footer when the guy on the next pier has just upgraded to a 240 foot with helipad and 10 suites. I'm still waiting for some Middle Eastern oil mogul to buy a decommissioned cruise ship. "My yacht has a 4-story atrium. Top that!"
^ You're tempting Larry Ellison, Spirit.
And here's a question: will Goldman Sachs ever move into that palace they're building down there?