Troubled Firm Could Shake Up Manhattan Real Estate

Tuesday, September 16, 2008

Lehman Brothers' bankruptcy will likely have domino effects on other industries, especially if it decides to sell its Times Square headquarters and sublease other space it uses. WNYC's Matthew Schuerman has more.

REPORTER: Throughout Manhattan, the bank occupies a total of about 2.7 million square feet of space, or the equivalent of 67 floors of a typical modern office building. While the company has not said how much of that will be leased or sold, Peter Rigaurdi of real estate brokerage Jones Lang LaSalle says it would be enough to make an impact.

RIGUARDI: If all of their space or 75 percent of their space came onto the market we could see vacancy rates go as high as 10 and a half or 11 percent.

REPORTER: The extra inventory would depress office rents by 15 percent, Rigaurdi predicts. But that's not all bad news: prices have risen by faster than that over the past few years, and some smaller firms would find New York suddenly a much more affordable place to do business. For WNYC, I'm Matthew Schuerman.


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