jones lang lasalle

Jones Lang LaSalle, a leading New York area commercial real estate brokerage with its corporate headquarters in Chicago, will absorb tenant rep firm Staubach Company in a $613 million deal announced on Monday. Staubach, headquartered in Dallas, was founded by Roger Staubach, who led the Dallas Cowboys to two Super Bowls in the 1970's.  read more »

Bank of New York Mellon has signed a 72,000-square-foot, five-year renewal at Beacon Capital’s 32 Old Slip (a.k.a. One Financial Square) downtown, according to a source. It's a deal that comes as the frequency of financial services leases has slowed markedly in the fiscal climate of late, with some banks giving up space.  read more »

The downtown Manhattan office vacancy rate dropped from 8.37 percent in the second quarter of 2007 to 7.76 percent at the end of the third quarter, which ended Sunday, according to a new report from brokerage Jones Lang LaSalle. The vacancy rate for top-flight, Class A space in downtown dropped from 7.08 percent in the second quarter to 6.09 percent in the third.

That was the case in Manhattan's other two main commercial markets, midtown and midtown south. In midtown, the Class A rate was down from 7.32 percent to 7.11 percent, and the overall rate was down to 7.28 percent, also from 7.32 percent. In midtown south, the Class A rate had dropped to a remarkably low 2.11 percent, from 2.78 percent in the second quarter; and the overall rate was down to 3.89 percent from just over 4 percent.

But it's downtown that the continued vacancy rate drops are most notable. It's downtown, after all, that has traditionally--and especially, since September 11--lagged the other markets in office leasing. The market has clawed its way back from 2001, to tangible gains for office landlords and for the economy down there as a whole. Office rents are up--the average Class A rents rose 2.97 percent from the second to the third quarter to $50.64 a square foot, according to Jones Lang LaSalle, still a bargain by midtown prices (those averages are in the $60's a foot), but well above what most would've expected only three or four years ago.

As residential markets all over the country crumbled this past summer, Manhattan’s remained strong. So, perhaps it’s little surprise that as commercial markets throughout the country now grapple with problems, Manhattan’s remains strong.

Thinking about commercial real estate now in the U.S. has to revolve around the problems in the credit markets. Money’s harder to come by for building buyers to finance their deals, and the credit market problems affect financial services firms that deal in debt and financing; financial services firms make up the bulk of leasers in the Manhattan office market.

Therefore, credit market problems are supposed to hamper the commercial market, squeezing both the would-be buyers of Manhattan buildings and a lot of the companies that lease space inside of them.

Whatever effect these problems are having on the investment sales market (when’s the last time you read about a $1 billion building buy in Manhattan), new information from brokerage Jones Lang LaSalle shows no impact so far on the prices for Manhattan office leases. Landlords are still able to charge higher-than-average rents to tenants in the borough’s choicest buildings. And tenants are still eager to pay.  read more »