Manhattan Office Market Overview

M A N H A T T A N M A R K E T

Manhattan Office Market Overview

Cushman & Wakefield Research

Third Quarter 2001

M A N H A T T A N M A R K E T

6.7

4.55.1 5.3

4.1

2.8

9.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1995 1996 1997 1998 1999 2000 3Q01

Manhattan Office MarketSublease available square feet (in millions)

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

Direct vs. Sublease

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Midtown Downtown Midtown South

Sublease

Direct

Third Quarter Leasing Activity

Square Feet

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

The Impact of September 11th

Cushman & Wakefield Research

M A N H A T T A N M A R K E T

Midtown

Downtown

Midtown South

Manhattan

Number ofBuilt Buildings

Inventory(Rentable Sq. Ft.)

OverallAvailable(Sq. Ft.)

OverallVacancy

Rate

799

237

416

1,452

225,022,113

107.908,924

62,514,739

395,346,776

15,879,861

6,369,865

5,479,422

27,729,148

7.1%

5.9%

8.8%

7.0%

Available SpaceAs of 09/01/01

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

12.5

7.7

0

2

4

6

8

10

12

14

Destroyed Damaged

Impact on Inventory - 9/11/01

DestroyedBuilding SFWorld Trade Center One 4.4World Trade Center Two 4.4World Trade Center Four .51World Trade Center Five .63World Trade Center Six .54World Trade Center Seven 1.9

Damaged Building SFOne World Financial Center 1.4Three World Financial Center 2.3Two World Financial Center 2.2130 Liberty 1.490 West Street .33

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

0.97

2.10

1.90

1.70

1.00

9.00

0.39 1.50

0.70

0.88

0.86

0.88

0.0

2.0

4.0

6.0

8.0

10.0

7/1 - 7/15 7/16 - 7/31 8/1 - 8/15 8/16 - 8/31 9/1 - 9/11 9/12 - 10/12

Additions Deletions

Additions/Deletions to the Market

Source: CoStar Group; Cushman & Wakefield Research

M A N H A T T A N M A R K E T

0.0

2.0

4.0

6.0

Midtown Midtown South Downtown

Direct Sublease

Space Added 9/12 - 10/12

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

Midtown

Downtown

Midtown South

Manhattan

Number ofBuilt Buildings

Inventory(Rentable Sq. Ft.)

OverallAvailable(Sq. Ft.)

OverallVacancy

Rate

800

231

416

1,447

226,847,764

96,184,539

62,514,739

385,547,042

17,853,216

6,146,772

5,452,359

29,452,279

7.9%

6.4%

8.7%

7.6%

Available SpaceAs of 09/30/01

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

17

.9

6.1

5.5

0.6 3

.0

9.8 1

1.5

8.1

2.8

0

5

10

15

20

MT DT

MTS

Harlem

Brook

/Que

ens

WCT/

FFCN N

JC N

J LI

Space Availabilities through the NYC Region

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

4,35

8,37

7

1,30

9,00

0

789,

128 2,28

0,00

0

966,

400

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Midtown Downtown MidtownSouth

Outside ofManhattan

Location TBD

Potential Relocation PreferencesCompleted and Pending Transactions

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

Midtown

Downtown

Midtown South

Manhattan

Number ofBuilt Buildings

Inventory(Rentable Sq. Ft.)

OverallAvailable(Sq. Ft.)

OverallVacancy

Rate

800

231

416

1,447

226,847,764

96,184,539

62,514,739

385,547,042

13,494,839

4,837,722

4,663,231

22,995,792

5.9%

5.0%

7.5%

6.0%

Available SpaceBased on Current Activity

Source: Cushman & Wakefield Research

M A N H A T T A N M A R K E T

Impact on TourismEstimated Visitor Spending Loss: $237.2 million (9/11-9/29)

– Hotels

Estimated Losses: $6-10 million/daily (as of 9/21)

Occupancy Rates averaging 50% compared to 89.5% in September 2000

4,000 job losses

– Restaurants

Losing $20 million daily (as of 9/21)

– Broadway

80% decline in ticket sales week of 9/11, representing a $3 - 5 million loss

Four shows closed; several others in jeopardy

Ticket sales have now stabilized

Sources: PFK Hospitality Consulting, New York Restaurant Association, League of American Theaters &

Producers, NYC & Company

M A N H A T T A N M A R K E T

Impact on the EconomyShort-term (Immediate days following and up to 1 year)

– 370,000 jobs affected south of Canal St, mainly FIRE and retail trade

– 50,000 employees displaced in the WTC, WFC and immediate vicinity

– Direct loss in Gross City Product (GCP) estimated at $8 billion through the end of September

Long-term and Permanent effects

– 17,000 jobs permanently lost due to relocation or elimination, mostly in FIRE sector, securities subsector

– 23,000 job losses in tourism-related industries in 2001 and 2002.

– Indirect job losses, mainly in service and trade, could amount to 40,000

– Total output (real GCP) lost could be as high as $30-40 billion in 2002 and 2003

– Including a U.S. recession and local multiplier effects, total private sector job losses could amount to 115,000 in 2002

– Wage income loss: $12 Billion in 2002

– Significant tax revenue loss

Source; New York City Office of Management and Budget

M A N H A T T A N M A R K E T

-100

-50

0

50

100

150

1999 2000 2001 2002 2003

Tho

usan

ds o

f Job

s

Before 9/11After 9/11

Private Sector Employment ForecastThousands of Jobs

Source: NYC Office of Management of Budget

M A N H A T T A N M A R K E T

-30

-25

-20

-15

-10

-5

0

5

10

1999 2000 2001 2002 2003

Tho

usan

ds o

f Job

s

Before 9/11After 9/11

FIRE Sector Employment ForecastThousands of Jobs

Source: NYC Office of Management of Budget

M A N H A T T A N M A R K E T

-30

-20

-10

0

10

20

30

40

50

60

70

80

1999 2000 2001 2002 2003

Tho

usan

ds o

f Job

s

Before 9/11After 9/11

Services Sector Employment ForecastThousands of Jobs

Source: NYC Office of Management of Budget