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Jan 04
2010
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Although layoffs have not been as severe as originally predicted, still-sizable job cuts have weakened apartment demand in Manhattan. With employers likely to continue thinning payrolls, developers have begun to alter plans in anticipation of declining residential demand. Multi-family permitting activity has dropped dramatically as a result. In February, for example, not one multi-family permit was filed in Manhattan. Renter demand has fluctuated markedly depending on location. Leasing activity has been sturdiest in the West Village, and SoHo. Buildings with rent-stabilized units, conversely, afford owners stability this year, as the Rent Guidelines Board approved increases of 3% and 6% for one and two-year leases respectively.
In all five boroughs, payrolls are projected to contract by 114,300 jobs in 2009. Manhattan employers will cut personnel levels by 2.9 percent, or 70,500 workers, after 27,800 positions were eliminated last year. Overall, vacancy in large, market-rate buildings is forecast to climb 140 basis points to 4 percent in 2009. While for most of 2009, apartment investment activity has been muted in Manhattan, investors should note that opportunities could be missed while waiting for possible fire-sale prices. I look forward to your comments and suggestions.
