Manhattan taking office rents off 40% in 2Q

Manhattan office taking rents have fallen by as much as 40 percent from the second quarter of 2008 to the same period in 2009, commercial real estate firm FirstService Williams says in a new report issued today.

While the survey showed average asking rents in Manhattan were down 26 percent quarter-over-quarter, to $58.52 per square foot from $79.39 per square foot, the taking rent fell even more.

"Our measures of taking rents indicate that the average may be down in the range of 35 percent to 40 percent over nearly the same time period," the report says.

The Plaza Stirs

FEW developments rode the wave of high prices in the Manhattan residential real estate the way the 181 condominium apartments at the Plaza Hotel did, and few have chilled as much in the downturn.

As it happened, the financial panic on Wall Street last September came just as the Plaza, the city’s most expensive condominium conversion ever, per square foot, was hit by a wave of bad publicity.

There were complaints that the finishes and details did not live up to the building’s luxurious image. A lawsuit by a Russian billionaire who signed up for a $53.5 million penthouse alleged “bait and switch” tactics. The suit and a countersuit by the Plaza were later settled.

Big Deal The Undeterred

THERE are many condominium owners and residential brokers around who remember the downturn in the 1980s, when the only work for brokers seemed to be helping banks with their inventories of unsold apartments. And in the last few months, after sales had fallen off a cliff once more, a handful of weakened small firms closed or were absorbed by larger firms.

But not everyone remembers those bad times, and two young brokerage firms, one specializing in new developments in Brooklyn and the other on Manhattan rentals and resales, have merged in the last few weeks, hoping to use the real estate recession to take on their older, larger and more experienced rivals. Two of the principals are only 32.