February 14, 2008 by jack petrie.

Fourth Quarter 2007 Market Overview

Tenant’s Viewpoint

Continuing uncertainty in the financial markets coupled with announcements of job cutbacks have quelled the surge that commercial real estate experienced over the last year. We expect this pause to continue through 2008 as the financial services industry continues to write down losses from the credit crisis. Tenants contemplating renewal or relocation should consider taking advantage of this window of opportunity before the uncertainty stabilizes and landlords and sublandlords regain their market bullishness.

Market Overview

The tide of sentiment about the strength of the New York City Office Market has ebbed even though the statistics remain strong. As more reports of job losses are published, we would expect to see this trend in confidence continue. Class A space in Midtown remains strong with a vacancy rate of 4.5%. Class A space in Midtown South and Downtown are also showing no signs of weakening, due to limited supply. The big winner in 2007 on absorption was Downtown Class A space which reduced its vacancy by almost half, absorbing 3.2 million rentable square feet (”rsf”) in comparison to 2.7 million rsf in midtown Class A space. Overall, there now appears to be less competition for space, and we see the first signs of landlords being more negotiable.

Trends & Statistics

Midtown
Midtown Class A vacancy rates decreased from 5% to 4.5% in the last quarter. Asking rents for Class A space continue to increase, now $83.32 per rsf. Vacancy in Class B midtown space improved to a new low of 3.9% from 4%, with asking rents decreasing slightly from $54.95 to $53.81 per rsf. Since Q4 2006, Class A vacancy rates have decreased 13.46% (from 5.2% to 4.5%) and the average asking rent has increased by $15.87 per rsf or 23.53%. Class B vacancy decreased nominally from 4% in Q4 2006 to 3.9% and asking rents increased $11.04 per rsf (or 25.81%). Q4 2007 Net absorption was 927,873 rsf for Class A space, almost 70% higher than Q3 2007. Class B absorption did an “about face” with positive absorption of 282,572 rsf (compared to the previous quarter which had negative absorption of 211,951 rsf).

Midtown South (Class A & B)
Q4 vacancy increased once again nominally from 3.8 to 4% from Q3, with asking rents increasing by another $4.99 per rsf (or 10.21%) to $53.85 per rsf. A year ago (Q4 2006), vacancy was 20% higher at 5%. Asking rents in the same period increased $13.80 per rsf or by 34.46%. Midtown South has continued to remain tight in light of the premium cost of space in Midtown. Net absorption in Midtown South in Q4 was quite low at 29,585 rsf, a reflection on the very limited availability in the submarket.

Downtown
Class A vacancy reduced by 10.17% from 5.9% in Q3 to 5.3% in Q4, with asking rents increasing only slightly ($o.98 per rsf) to $52.46 per rsf. Class B vacancy increased marginally in Q4 2007 to 9% from 8.3% in Q3, but asking rents continued to climb by 6.45% to $46.71 per rsf. A year ago, Class A Vacancy was 10.3%, and class B was 10%. Asking rents were $45.27 per rsf and $36.38 per rsf, respectively. This shows a massive 48.54% reduction in vacancy for class A (10% for class B) and an increase of 15.88% (Class A) and 28.39% (Class B) in asking rents.

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February 14, 2008 by jack petrie.

3PAR Inc., a Fremont, Calif.–based provider of utility storage, has recently signed a five-year lease for office space at 1 Whitehall Street, NYC, 10004. 3PAR was represented in the transaction by Kristian Hansen and Jack Petrie of CresaPartners.

About 3PAR

3PAR, which raised $105 million in its November, 2007 IPO, is relocating and expanding from its existing location in an executive suite on Wall Street. The company’s IPO sold 7.5 million common shares at $14 per share, for an initial market cap of approximately $840 million. It will trade on the NYSE Arca under ticker symbol PAR.

Previously, 3PAR had raised around $185 million in total VC funding since its 1999 inception, from firms like AllianceBernstein LP (f.k.a. Alliance Capital), Integral Capital Partners, Mayfield, Menlo Ventures, Open Field Capital, Van Wagoner Capital Management and Worldview Technology Partners

About 1 Whitehall Street

1 Whitehall Street located between Bridge and Stone Streets is a 300,000 square foot office building constructed in 1962. It has been continuously owned by Rudin Management Company and is currently 100% leased. Major tenants include the Topps Company, The Enterprise Foundation, St. Paul Travelers and International Shipholding Company.

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February 13, 2008 by jack petrie.

AlwaysOn On Media Conference Overview

I recently attended the AlwaysOn OnMedia conference (see photo) held in NYC at the Mandarin Oriental Hotel in NYC on January 28th-30th. I was impressed by the continuous lineup of panel discussions featuring technology and new media CEO’s and their investors. I also enjoyed the overall quality of the business concepts and content in the presentations as well as the escalating sense of a tech/new media community developing in NYC. Here’s the lowdown on some other upcoming events:

Upcoming iBreakfast Alert

On February 27^th, CresaPartners will cosponsor and host the iBreakfast on “Web Video: Monetizaton Challenges & Opportunities”. The event will feature a panel discussion with Bryan Thatcher of Empressr; Marcien Jenckes, CEO of Voxant; and John Lumpkin of Heavy Media.

Web Video is everywhere - it is one of the fastest growing uses of the Internet and it is spilling over to mobile. But can this visual cornucopia generate profit? Three great companies tell us how they are doing it - or expect to do it.

About Empressr

Empressr is the first Ajax/Flash-based Web-enabled application that allows you to create, manage, publish, and share presentations online. Empressr is developed by Fusebox to answer the limitations of existing presentation applications – namely, if streaming video and Flash are more dynamic ways to present important information, then why shouldn’t businesses and individuals be able to include them in presentations? The result is an application so innovative, it will revolutionize the way presentations are created.

About Voxant/Marcien Jenckes

Voxant is building a network that delivers unparalleled licensed

content, advertising and syndication services to the millions of Web sites and

niche communities that comprise the Web. Voxant’s 20,000+ Web publisher

affiliates have access to the Web’s largest, most diverse selection of free,

high quality, fully licensed news and information for their Web sites and

blogs. Voxant provides full monetization while maintaining control over

content integrity, quality and branding for more than 250 content providers.

Voxant is backed by SoftBank Capital, Longworth Venture Partners and Court

Square Ventures.  For more information, please visit www.voxant.com.

Voxant announced earlier this year that Internet industry veteran Marcien Jenckes has been named Chief Executive Officer.  As CEO, Jenckes will provide

strategic direction as Voxant continues its aggressive growth, solidifying its

position as the world’s largest online syndication network. Before joining Voxant, Jenckes served as Senior Vice President of Messaging Community, Voice at AOL, and was responsible for launching AOL’s free web services and online network, which attracts more than 100 million monthly visitors. Prior to AOL, Jenckes worked at McKinsey and Company in Washington DC, as a member of their Media & Technology practice.  Jenckes holds an MBA from Darden at the University of Virginia, and a BA in Economics and Political Science from New York University.

About Heavy/John Lumpkin

Heavy.com is one of the web’s leading consumer video companies and the leader for 18-34 year old males. Heavy combines its own unique original programming with those of its users to create an environment where you can control and even participate in your own personal video experience. Heavy’s original programming staples include “Superficial Friends,” “Kung Fu Jimmy Chow,” “The Massive Mating Game,” “The Burly Sports Show,” and “Behind the Music that Sucks.” John Lumpkin is a fomer publisher at Stuff.

iBreakfast Update

Other recent iBreakfast events included:

January 31, 2008 - Web 2.0 NY - The Monetizing Conference

This conference focused on the many paths successful Web 2.0 companies have taken to turn relationships into dollars.

December 19, 2007 iBreakfast - New Opportunities with TV and Mobile Ads

After the great Tech Company Land Grab on Madison Ave. the advertising world has become highly digitized. What does this mean for the industry - especially with TV-Web Advertising integration and the emerging world of Mobile Advertising?

November 28, 2007 iBreakfast - Monetizing the the Web 2.0

This event looked at advertising from the perspective of Google, which has been dramatically extending its footprint on Madison Avenue and looking for new ways to reach people through mobile advertising.

Following this breakfast, a full report has been made available, featuring an inside look at Google’s inventions that reveals the depth of their technology and how the company is poised to challenge incumbents in publishing, telecommunications, and other market sectors. The 266-page study Google Version 2.0: The Calculating Predator is now available. For more information visit www.ibreakfast.com.

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February 11, 2008 by jack petrie.

With the recently announced closing of the NYSIA (”New York Software Industry Association”) technology incubator

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20080208/FREE/330958854/1064/newsletter01

and the rumored closing of a similar, university-based incubator; technology firms currently face increasing challenges in solving their office space requirements in New York City.

Firms from those that operate in a “virtual” mode to those in executive suite centers - have always had a need for flexible, shared office environments. With the demise of the larger incubators, this demand has surged while no sign of increased supply exists. We expect that the looming softness in the service economies may create future excess space capacity that may hit the sublease market, but for now supply is short.

Recently, CresaPartners has recently identified two opportunities that may be of interest to potential space sharers:

Downtown - Broadway & Wall Streets

A CresaPartners client in the technology sector, has asked us to market a portion of its space for sublease on a “shared” basis. The available space can range in size from 1 workstation up to 10 workstations, or from approximately 200-2,000 rsf. Furniture is available as are the use of a shared conference room and pantry.

Midtown – Sixth Avenue & 36^th Street (See Photo)

An accounting firm has asked us to market “shared” space within its offices near Penn Station. The available space consists of 1 private, corner office and four (4) workstations, or approximately 1,000 rsf. Furniture and phones are available as is use of a shared conference room, pantry and training room. A private bathroom is available.

If interested in either opportunity, please contact Jack Petrie at 212.389.2361 or jpetrie@cresapartners.com

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