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MIDTOWN'S MIDDLING. Downtown's downcast. That about sums up thesplit personality of today's Manhattan office-rental scene. According to real estate brokers, owners and analysts, New York isstill struggling to adapt to the ramifications of October's stock market crash. For every proponent of "cautious optimism," there's a skeptic.
"Overall, it's a pretty healthy market," said Raymond O'Keefe, executive vice president and New York regional director of Cushman & Wakefield, a diversified real estate company.
Lloyd Lynford, president of REIS Reports, is less certain. "Things will get worse before they get better," he said. "Ultimately, however, `Black Monday' could be a positive thing. As effective rents fall below the $30 {per square foot a year} downtown and $35 Midtown threshhold, many companies may feel justified in staying in Manhattan."
For companies in search of office space, today's mini-glut is a welcome bonanza. While owners are asking slightly higher rents than last year, bargains abound. At the end of April, owners of new buildings sought an average of $42.13 a square foot per year, compared with $39.53 in April, 1987. Rents in old buildings were about one-third cheaper - $27.58, compared with $26.77 in April, 1987.
In reality, brokers are horse-trading, throwing in valuable incentives to entice companies to relocate. These include periods of free rent on long-term leases and free interior improvements.
Downtown, brokers said, the glut should begin to shrink later this year, barring another stock market crash. Last month, downtown's vacancy rate was...