Manhattan Office Market Overview
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Transcript of Manhattan Office Market Overview
M A N H A T T A N M A R K E T
Manhattan Office Market Overview
Cushman & Wakefield Research
Third Quarter 2001
M A N H A T T A N M A R K E T
6.7
4.55.1 5.3
4.1
2.8
9.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1995 1996 1997 1998 1999 2000 3Q01
Manhattan Office MarketSublease available square feet (in millions)
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
Direct vs. Sublease
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Midtown Downtown Midtown South
Sublease
Direct
Third Quarter Leasing Activity
Square Feet
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
The Impact of September 11th
Cushman & Wakefield Research
M A N H A T T A N M A R K E T
Midtown
Downtown
Midtown South
Manhattan
Number ofBuilt Buildings
Inventory(Rentable Sq. Ft.)
OverallAvailable(Sq. Ft.)
OverallVacancy
Rate
799
237
416
1,452
225,022,113
107.908,924
62,514,739
395,346,776
15,879,861
6,369,865
5,479,422
27,729,148
7.1%
5.9%
8.8%
7.0%
Available SpaceAs of 09/01/01
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
12.5
7.7
0
2
4
6
8
10
12
14
Destroyed Damaged
Impact on Inventory - 9/11/01
DestroyedBuilding SFWorld Trade Center One 4.4World Trade Center Two 4.4World Trade Center Four .51World Trade Center Five .63World Trade Center Six .54World Trade Center Seven 1.9
Damaged Building SFOne World Financial Center 1.4Three World Financial Center 2.3Two World Financial Center 2.2130 Liberty 1.490 West Street .33
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
0.97
2.10
1.90
1.70
1.00
9.00
0.39 1.50
0.70
0.88
0.86
0.88
0.0
2.0
4.0
6.0
8.0
10.0
7/1 - 7/15 7/16 - 7/31 8/1 - 8/15 8/16 - 8/31 9/1 - 9/11 9/12 - 10/12
Additions Deletions
Additions/Deletions to the Market
Source: CoStar Group; Cushman & Wakefield Research
M A N H A T T A N M A R K E T
0.0
2.0
4.0
6.0
Midtown Midtown South Downtown
Direct Sublease
Space Added 9/12 - 10/12
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
Midtown
Downtown
Midtown South
Manhattan
Number ofBuilt Buildings
Inventory(Rentable Sq. Ft.)
OverallAvailable(Sq. Ft.)
OverallVacancy
Rate
800
231
416
1,447
226,847,764
96,184,539
62,514,739
385,547,042
17,853,216
6,146,772
5,452,359
29,452,279
7.9%
6.4%
8.7%
7.6%
Available SpaceAs of 09/30/01
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
17
.9
6.1
5.5
0.6 3
.0
9.8 1
1.5
8.1
2.8
0
5
10
15
20
MT DT
MTS
Harlem
Brook
/Que
ens
WCT/
FFCN N
JC N
J LI
Space Availabilities through the NYC Region
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
4,35
8,37
7
1,30
9,00
0
789,
128 2,28
0,00
0
966,
400
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Midtown Downtown MidtownSouth
Outside ofManhattan
Location TBD
Potential Relocation PreferencesCompleted and Pending Transactions
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
Midtown
Downtown
Midtown South
Manhattan
Number ofBuilt Buildings
Inventory(Rentable Sq. Ft.)
OverallAvailable(Sq. Ft.)
OverallVacancy
Rate
800
231
416
1,447
226,847,764
96,184,539
62,514,739
385,547,042
13,494,839
4,837,722
4,663,231
22,995,792
5.9%
5.0%
7.5%
6.0%
Available SpaceBased on Current Activity
Source: Cushman & Wakefield Research
M A N H A T T A N M A R K E T
Impact on TourismEstimated Visitor Spending Loss: $237.2 million (9/11-9/29)
– Hotels
Estimated Losses: $6-10 million/daily (as of 9/21)
Occupancy Rates averaging 50% compared to 89.5% in September 2000
4,000 job losses
– Restaurants
Losing $20 million daily (as of 9/21)
– Broadway
80% decline in ticket sales week of 9/11, representing a $3 - 5 million loss
Four shows closed; several others in jeopardy
Ticket sales have now stabilized
Sources: PFK Hospitality Consulting, New York Restaurant Association, League of American Theaters &
Producers, NYC & Company
M A N H A T T A N M A R K E T
Impact on the EconomyShort-term (Immediate days following and up to 1 year)
– 370,000 jobs affected south of Canal St, mainly FIRE and retail trade
– 50,000 employees displaced in the WTC, WFC and immediate vicinity
– Direct loss in Gross City Product (GCP) estimated at $8 billion through the end of September
Long-term and Permanent effects
– 17,000 jobs permanently lost due to relocation or elimination, mostly in FIRE sector, securities subsector
– 23,000 job losses in tourism-related industries in 2001 and 2002.
– Indirect job losses, mainly in service and trade, could amount to 40,000
– Total output (real GCP) lost could be as high as $30-40 billion in 2002 and 2003
– Including a U.S. recession and local multiplier effects, total private sector job losses could amount to 115,000 in 2002
– Wage income loss: $12 Billion in 2002
– Significant tax revenue loss
Source; New York City Office of Management and Budget
M A N H A T T A N M A R K E T
-100
-50
0
50
100
150
1999 2000 2001 2002 2003
Tho
usan
ds o
f Job
s
Before 9/11After 9/11
Private Sector Employment ForecastThousands of Jobs
Source: NYC Office of Management of Budget
M A N H A T T A N M A R K E T
-30
-25
-20
-15
-10
-5
0
5
10
1999 2000 2001 2002 2003
Tho
usan
ds o
f Job
s
Before 9/11After 9/11
FIRE Sector Employment ForecastThousands of Jobs
Source: NYC Office of Management of Budget
M A N H A T T A N M A R K E T
-30
-20
-10
0
10
20
30
40
50
60
70
80
1999 2000 2001 2002 2003
Tho
usan
ds o
f Job
s
Before 9/11After 9/11
Services Sector Employment ForecastThousands of Jobs
Source: NYC Office of Management of Budget