Do you feel burdened with an empty storefront? Are you convinced you’re the only landlord saddled with too much debt? Do you feel terrified that the bottom of this infernal market will never come? Are you anxious? Depressed? Lonely?
Call your broker.
The plunging market has turned commercial real estate brokers—those hard-nosed, pinstriped wheeler-dealers who play by few rules but their own—into purveyors of comfort and wisdom. It’s an activity that brokers, being brokers, have archly dubbed “hand-holding.”
“The landlords, the owners, the developers, whether they have one building or millions of square feet, they are in need of constant hand-holding and assurances,” said Faith Hope Consolo, chairwoman of the retail leasing and sales division at Prudential Douglas Elliman. “Now, to hear from a landlord five times a day is not unusual. The same landlord. And asking the same questions over and over. If they ask you the same question at 9, they ask it again at 11:30.”
“The phone is ringing off the hook,” concurred Robert Freedman, executive chairman of Williams Real Estate, a First Service Company (formerly known as GVA Williams), as another horn indeed ring-ringed in the background at his office.
“We’re fielding more kinds of calls and more kinds of inquiries than are really occasioned by this kind of economy,” he said. “It’s unnerved a lot of people.”
The anxiety of real estate owners and tenants is not hard to fathom. By the end of October, Manhattan asking rents had dropped 5.6 percent from their peak in May, according to Colliers ABR. Meanwhile, the Class A vacancy rate had hit 8 percent, and experts expect it to rise into the teens in the coming year. Compared to the third quarter of 2007, the amount of available sublet space in Manhattan has swelled 113 percent. That is bad, bad news for landlords, many of whom are facing pending debt obligations.
The tidings aren’t much better for tenants. The financial ones have mostly imploded. The rest of them are, like most businesses, subject to the whims of a worsening economy. It’s little wonder that New York landlords and tenants have found a knot in their collective gut.
“Socially, there’s a kind of monomania about the economy,” said Mr. Freedman, his basso profundo voice almost immediately lulling this reporter into a state of serenity. “You go to dinner parties, and that’s all people are talking about. It has become the lingua franca of social intercourse in this town and every other. It’s total immersion. One of the ways you manage anxiety is by discussing it. It’s not radically different from going to a mental health professional for your problems.”
Mark Weiss, executive vice president and principal at Newmark Knight Frank and a tenant rep, said he, too, is “seeing very, very agitated clients.” And like most successful brokers, he makes a point of being there for them.
“Generally, when a client calls to talk, I just go there,” he said. “At times like this, everybody on the quote-unquote team needs to be very close to the principals.”
OF COURSE, anxiety levels among landlords and tenants vary depending upon their respective predicaments (and their respective emotional health). Brokers, in turn, have developed a variety of techniques with which to counsel their (rightly) concerned clients.