2003 is having a difficult transition period. Some say the recession ended November 2001 yet unemployment levels have reached a nine-year high. The stock market has rebounded yet corporate profits are down. Mortgage rates are drifting up yet houses still sell at unprecedented levels.
The upbeat stock market is betting on the future by hoping Greenspan’s rate cuts and Bush’s tax cuts will increase consumer spending and confidence boosting corporate production and employment. Wishful thinking. In the meantime, since corporations are still not hiring they don’t need office space. This has caused national vacancy rates to stay high and large blocks of sublease space to remain available.
Long Island, on the other hand, continues to have one of the lowest unemployment rates in the country at 4.1% and the country’s second lowest vacancy rate at 12.3%. Unfortunately for Long Island landlords that 12.3% translates into 12.5M Square Feet of vacant space of which approximately 1.5M is sublease space. That’s a lot of space. For office tenants this is good news. Landlords have become very flexible as they aggressively seek quality companies as tenants. Great deals are being offered that were unheard of five years ago. Companies are taking advantage by moving from “B” buildings to “A” buildings. However if the Stock Market is correct these opportunities will not last forever. Best to take advantage of them now, the future is coming.