Commercial Property Investors undeterred by Massive Finance and Banking Job Cuts

Commercial real estate analysts and investors seem undeterred by the tens of thousands of finance jobs being cut to tackle the billions of dollars of subprime debt the market is facing.

According to a Chicago-based finance and banking job recruitment agency, financial companies based in New York announced 42,400 finance job losses in October this year compared with 8,300 finance and banking job cuts throughout the year of 2006. These figures do not include the masses of finance job cuts expected from the large banking organisations such as Merrill Lynch and Citigroup.

What this means for real estate investors is that large blocks of empty space could be returned to the market due to the massive numbers of finance and banking job losses. This could reverse the robust growth in rent that landlords have enjoyed over the past several months. But few Manhattan real estate experts seem alarmed by the announcement of masses of finance and banking job cuts. Most experts predict rent growth will level out over the next year or grow at a slower rate. Some experts say broader financial services job cuts could decrease rents by 10% from their current record highs.