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When Standard & Poor's last week inked a mega-deal for 933,000 square feet of space at 55 Water St. downtown, it was the clearest signal yet of how quickly the real estate market has changed.
Not long ago, 55 Water couldn't find tenants, despite offering advanced technology and rents in the mid-$20s per square foot. But in recent weeks, it has been at the center of the affections of a series of companies as prestigious as S&P, Goldman Sachs and the Royal Bank of Canada.
The 55 Water deal is only the tip of the iceberg. More than two dozen of the city's largest corporations are now looking for new Manhattan offices, and they are about to set off a frenzy of dealmaking that could both drive up rents and force some firms to the suburbs.
"This is easily the most activity since 1987," says Franklin Speyer, an executive director at Cushman & Wakefield Inc.
The sheer amount of square footage in demand due to these large-tenant deals is enormous. A conservative estimate puts it at more than 10 million square feet.
The names of those companies prowling the market are equally impressive: Bear Stearns, Reuters, Morgan Stanley, Empire Blue Cross and Blue Shield, Young & Rubicam, Ziff-Davis Publishing, Guardian Insurance, Barclays, Grey Advertising (see chart). (Chart omitted)
10 floors needed
These tenants all need 200,000 square feet of space or more--the rough equivalent of 10...