Report: 90,000 Job Losses Will Mean Lots of Open Office Space

The projected 80,000 to 90,000 in office-based job losses between now and the end of 2009 could be enough to drive the Manhattan office vacancy rate well into double-digit percentages. A new report from Colliers ABR predicts the rate could rise to somewhere between 12 and 13 percent, well above the September rate of 7.4 percent, as companies shed space after shedding employees.

But there's two things working in the market's favor (and the favor of landlords and landlord brokers):

• There's not a lot of new office space coming online in 2009--only 3.4 million square feet, according to Colliers ABR. Manhattan, then, is not overbuilt, promising a relatively low inventory of unleased office space at any one time (until, of course, the World Trade Center site towers start coming online in a few years).

• The market's cyclical. While the sudden flaccidity of leading office leaser financial services twisted things a bit, no one's ringing the alarm bell quite yet on behalf of landlords. "The reality is that there will be short-term pain but the market will recover in some way, shape or form by late 2010/early 2011," according to Colliers ABR.