It’s the end of July, and for the brokerage community, that means one thing: Crain’s publishes its biannual list of Manhattan’s top office leasing deals, using data from CoStar. Though, frankly, publishing the list this annus horribilis—and then writing about the publishing of the list—seems to border on the sadistic.
But hey! It’s our job!
Let’s get the obvious out of the way. CB Richard Ellis, the city’s (and country’s) largest commercial brokerage firm, retained its position atop the heap, representing the tenant or landlord in 22 of the 50 biggest leasing transactions of 2009. As we said, that’s not surprising. Nor should we be surprised that the sum total of all 22 of those leasing transactions was pitifully small—but we were, because apparently we still retain some capacity for shock. Those 22 transactions totaled a mere 1.75 million square feet. This time last year, when CBRE also topped the list, its transactions totaled 4.9 million square feet.
In a market where everybody’s suffering, you find solace where you can.
“We feel great about the results,” said CB Richard Ellis executive managing director Matt Van Buren. “We think in a down market, more so than ever, market share matters.”
If that’s the case, then both Studley and Newmark Knight Frank, both firms specializing in tenant representation, should feel proud.
Studley had three transactions in the top 10 (including the top two), and seven in the top 50, totaling 808,686 square feet. This time last year, it appeared only three times in the list. Studley chairman and CEO Mitch Steir attributed his firm’s impressive showing to its focus on tenant representation (a not-so-subtle jab at some of his competitors, like Cushman & Wakefield and CBRE, which represent both tenants and landlords—sometimes at the same time!).
“We believe that it’s quite difficult to advocate for a tenant zealously when one also has a fiduciary responsibility to a landlord,” Mr. Steir pointed out.
CBRE is the Yankees. C&W is the Boston Red Sox. They’ve been beating each other up for years and years. Along come the Tampa Bay Rays. New team. Getting their legs. You know who went to the World Series last year, don’t you? – Newmark Knight Frank’s Jimmy Kuhn
Newmark Knight Frank tied archrival Cushman & Wakefield in the number of deals it had on the list, appearing on at least one side of the negotiating table in 13 big leases in the top 50, totaling 868,265 square feet. This time last year, Newmark appeared only 11 times in the list. Cushman & Wakefield, also on at least one side of the table with 13 big leases, inched out a slight lead over Newmark in total area leased, with 892,284 square feet.
And while Cushman, like everyone else, saw a marked decline in transactional activity, its drop-off in big leases was not as severe as CBRE’s. Last year this time, Cushman had 1.9 million square feet of leases in the top 50, a decline of 53 percent to CBRE’s 64 percent drop (note: not in total leasing, but in the number of square feet of leases that appeared in the top 50 this time in 2008).
Cushman & Wakefield did not respond to a request for an interview. But Newmark Knight Frank president Jimmy Kuhn described the brokerage hierarchy thusly:
“Let me give you an analogy. You probably won’t use it. Do you follow baseball?”
“Everybody will tell you today that the three best teams in baseball all are in the American League East and nothing matters other than that: the Yankees, the Boston Red Sox and the Tampa Bay Rays. In the real estate world you can talk about the entire country all you want, but the only thing that really matters is New York City. CBRE is the Yankees. C&W is the Boston Red Sox. They’ve been beating each other up for years and years. Along come the Tampa Bay Rays. New team. Getting their legs. You know who went to the World Series last year, don’t you?”
“The Tampa Bay Rays.”
Editor’s note: Mr. Kuhn said “Tampa Bay Buccaneers,” referring to the NFL franchise, and the original version of this story reported that. We believe, however, he was referring to the Tampa Bay Rays of Major League Baseball.