Recently a spurt of leasing activity has led some to believe that the market is changing for the better.  Taken literally this would lead some Tenants to “lease or get off the pot” – however my professional feeling is that leaping for an opportunity at the present time would be a mistake.  Don’t rush into a deal because brokers are using the words “bottom” and “reversal” so flagrantly.  I don’t see how anybody could interpret the bad times in commercial real estate being over.  To whit, the larger firms are still thinning out their ranks of agents on a “last in, first out” basis.

I believe the activity is largely in response to some landlords lowering their expectations to adjust to the market.  At a certain price point, the market will respond and agree “that’s a good deal”.  People have certain values in mind.  Personally I think that when decent midtown space cost $40-45 per sq. ft., the price reflected the value at which a normal business person could pay rent and make a fair profit.  Today, as rents edge in that direction, some tenants are willing to pull the trigger on a new lease having reached their personal value/comfort equilibrium point.

So, the increase in activity should be viewed as a response to changing market conditions more so than a sea change in the market.  There will be more bad times before the good times return.