“Operating in this economy is sort of like a game of dodgeball.”
So said Brookfield Properties (BPYPP) CEO Ric Clark during his firm’s second-quarter investor call on Wednesday morning. Brookfield Properties owns and manages 75 million square feet of office towers in Canada and New York, including the Grace Building at 1114 Avenue of the Americas and the mammoth World Financial Center in Lower Manhattan.
The affable Mr. Clark did not sugarcoat his firm’s predictions for the years ahead.
“Our crystal ball is not calling for a recovery this year nor the first half of next year, if at all next year,” he said.
Brookfield’s U.S. commercial operations president and CEO Dennis Friedrich elaborated. “Leasing fundamentals continued to soften during the quarter in our core U.S. markets,” he said, adding that each Brookfield market, with the exception of Denver’s central business district, experienced an increased vacancy rate.
In New York, “leasing activity during the quarter remained well below historical levels in both midtown and downtown.”
Indeed, Brookfield had no midtown leases to report in the second quarter. Downtown was a different story. “Tata International renewed [for 15,000 square feet] at One World Financial,” Mr. Friedrich said. And Jane Street Capital signed an eight-year, 14,000-square-foot expansion and renewal at One New York Plaza.
Speaking of downtown, what of Bank of America, and its apparently eternal deliberations about what to do with Merrill Lynch’s 4.2 million square feet in World Financial Center? They’re still deliberating.