News
3 REASONS WHY Q1 LEASING LAGGED
April 9, 2012
| Last quarter was the second slowest Q1 in 18 years when it came to leasing velocity, according to Cassidy Turley NY Tri-State prez Peter Hennessy. Here’s why: |
| 1) SPACE NEEDS GOIN' DOWN |
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| Across sectors, Peter says one factor has been consistent: Square feet needed per person keeps moving downward. “All of our clients are doing more with less, and this drive is pronounced.” Now, space needed averages between 100 SF and 105 SF per person; it used to be double that. And allotted desk space is rivaling that of a trader’s desk. (Sounds like we’ll soon need to make ourselves smaller to go work.) Peter (third from right) joined Cassidy Turley NY Tri-State chairman Mark Boisi, chief economist Kevin Thorpe, MSNBCMorning Joe co-hosts Joe Scarborough and Mika Brzezinski, and Cassidy Turley director Noble Carpenter at the firm's recent State of New York event. |
| 2) LESS EXTRA ROOM |
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| Growing tenants used to take 10% to 15% extra space for future growth, but that has dropped to 5% to 9%, Peter says. In fact, when Cassidy Turley moved to 277 Park Ave in November, it spent $75/SF to retrofit the 48k SF to make it more efficient to achieve that flexibility for growth. |
| 3) NO PSYCHICS ON STAFF |
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| Peter expects more office leasing as early as Q3, but there’s still uncertainty around the 2012 elections, and job numbers are still not there. The financial sector, in particular, which makes up 25% of NYC’s office tenant base, is contracting. “We’re still way below what people’s expectations were, and with slow job growth, there won’t be a big demand for space,” he says. “It will ripple throughout the economy.” |
