As the World Turns: Leasing Activity Impact Markets First, Then Owners

“It really depends on the size of the tenant you’re talking about,” said Mr. Durels. “If it’s a small tenant, call it 10,000 square feet or less, you’ve got to deliver the space built, which is why you’re not seeing us stop the pre-build program.”

Perhaps one of the most important changes on the horizon has to do with the upcoming presidential election, as some owners suggested that policy changes and a more optimistic view of the world economy could boost leasing activity.

“It feels like tenants are hesitant to make long-term lease commitments until there is more clarity about the future,” said Nicholas C. Bienstock, managing partner of Savanna. “The uncertainties about the upcoming federal election, how government regulation will affect financial institutions and their business models, the continued deterioration in Europe and potential slowdown in Asia make it difficult for companies to feel optimistic about growth.”

For a lot of potential tenants, the leasing environment right now is at a stable place that could set up 2013 quite well.

“I think a lot of people are getting their thoughts together for the end of 2013,” said Fred Posniak, senior vice president at W&H Properties, which operates a portfolio that includes the Empire State Building and 1 Grand Central Place. “Summer is often a planning stage,” he said, adding that while leasing has been slow, his company has had a very busy summer in terms of touring, which gives him hope for the rest of the year.

“You’re seeing a broader geographic search by a lot of tenants, and that’s what’s adding a different twist to the competitive landscapes,” Mr. Durels said.

Whether the favored landscape in 2013 turns out to be Downtown, the West Side, Midtown South or other perennial favorites, the only thing certain is that every property owner will be looking up, looking for the next glimpse of hope for the future of commercial real estate.