Labor Day has a psychic symbolism for commercial real estate brokers this year that has little to do with the plight of the American worker.
Rather, some are predicting that, once New York City’s deal makers have returned from their Labor Day Hamptons sojourns all bronzed and plump, having spent countless hours running their fingers through the sand while contemplating the fierce expanse of the Atlantic Ocean, office asking rents will start dropping.
“After Labor Day, a lot of people who’ve been on the offensive, they have gotten some feedback and will start to realize that, hey, this economy isn’t as strong as we thought,” said Robert Stella, executive vice president and principal at tenants’ rep CresaPartners, who said he’d likely go to his place up in Connecticut this month. “I think they’re going to come back and look at things differently.”
Isn’t that, after all, what vacations are all about? Particularly when said vacations come right before all of the budget-tinkering at the end of the third quarter?
David Lebenstein, a senior managing director at Colliers ABR, said Mr. Stella had a point.
“As we move into the fall and into early next year, you will see a further softening of the market,” said Mr. Lebenstein, who will be spending the week before Labor Day with his family at their beach house on Fire Island. “I think people come back after Labor Day and soberly assess where they stand.”
Which is not to say that office rents haven’t already begun to drop somewhat, at least anecdotally (the stats remain pretty mixed at this point).
Jeffrey Roseman, executive vice president of retail at Newmark Knight Frank, said that he’s already seen some price “correction” in the retail market, particularly on the Upper West and Upper East sides.
“The retail banks drove up the rents so unnaturally for a couple of years that I would be embarrassed sometimes to quote an asking rent,” Mr. Roseman said. “Where a neighborhood was $400 a foot and really was only supposed to be $250, it’s back to $250.”