Commercial Leasing Is Collapsing. Again. Maybe.
Brace yourselves, the end of the world in commercial leasing is coming. Just kidding.
The Real Deal predicts an “upcoming collapse facing commercial leasing.” Peter Kiefer writes, “Just as signs of a rebound start to emerge, researchers say New York’s commercial leasing market could be barreling toward a train wreck in 2013 and afterward.” The issue makes explicit what’s been in the backs of the minds of many in the industry: that thousands of office leases will be rolling over in the next few years, and they’re probably not going to be renewed at 2006 prices.
The Real Deal blinks at the last minute, adding a “maybe” to the headline, which will no doubt go ignored. But one problem is the assumption that the commercial industry is faring well as it is. We’ve also all just learned that commercial prices dropped 3 percent in July for the second consecutive month. That brings prices dangerously close to where they were in October 2009, the last time the headlines had brokers and owners stocking canned goods.
As Erik Schmall, executive managing director of Studley, points out in the article, “I swear I have heard this for the last two years, and I am just not buying it.”