Real estate executives, building owners, and leasing brokers are anxiously watching the start of the fall season, as September marks a time when office leasing activity often picks up after the summer doldrums, setting the tone for remainder of the year.

Unfortunately, the credit crisis and dislocation of the capital markets is persisting. According to trade sources, Wall Street investment banks failed to securitize even a single dollar of collateralized mortgage-backed securities over the summer. With Wall Street basically shut down for financing, the sales volume for investment properties is stagnant. Combine this with a year in which thousand of individuals have lost jobs, and the outlook seems bleak. Yet despite all the negatives affecting the market, industry leaders are cautiously optimistic.

“The current real estate market is far more resilient than it gets credit for,” the president and chief executive for the New York Tri-State Region at CB Richard Ellis, Mitchell Rudin, said. “Certainly, it has fallen off since last year, but fundamentals are strong. Asking rents are up more than 12% over last year, although the pace has slowed, and effective rents have declined somewhat. While leasing velocity is off from 2007, the availability rate is very close to equilibrium, at a healthy 9.3%, and vacancy is also historically strong, at 5.8%.”

While a number of people are predicting doom and gloom, the actual statistics about the leasing market are rather positive. According to CB Richard Ellis, leasing activity is off 10% from 2007, with total space leased this year at 12.21 million square feet, compared with 13.51 million last year. Renewal activity, not including leasing activity, accounts for 40% of total velocity. This pace is up from 34% in 2007, and 26% in 2006. The availability rate has climbed to 9.3% due to new supply; at the start of 2008, the availability was 7.9%. The current average asking rent is $71.92 a square foot, an increase of 12.5% from 2007, when the rent was $63.93 a square foot.

“There is ongoing demand for top-tier, technologically equipped office space set against minimal new construction, keeping lease rates high,” Mr. Rudin said. “Hedge funds and law firms, as well as media and creative firms, are particularly active on the leasing side.”

A number of high-end transactions have been inked, with approximately 2.1 million square feet of leases with a starting rent of at least $100 a square foot so far this year, compared with just 1.9 million square feet during the same period last year.

“It is not as bad as what your hearing. Leases are getting signed and negotiated both in Midtown and downtown,” the chairman of global brokerage at CB Richard Ellis, Stephen Siegel, said. “Approximately 500,000 square feet of leases are pending in downtown in buildings, including 7 World Trade Center, 100 Church St., and 25 Broadway. There has been good activity in Midtown, where major leases are pending or close to be signed at 277 Park Ave., the Citicorp Center, and at the Boston Properties building under construction at 55th Street and Eighth Avenue. There are also a number of boutique-size deals at very high numbers floating around the General Motors Building, 9 W. 57th St., and 510 Madison Ave. While net effective rents might be down slightly on large deals, due to some increase in concessions, face rents are holding very firm.”

Not everyone has as positive an outlook: “Leasing velocity is definitely off. Concession packages have gotten better for tenants and fixed rental rates have stopped rising and seem to have stabilized,” the partner and chairman of the commercial real estate leasing practice group at law firm Loeb & Loeb, Raymond Sanseverino, said. “I would expect fixed rents to drop as landlords grow anxious to lease vacant space and have to compete with subleases, where activity has increased.”

The co-founder and managing member of Murray Hill Properties, one of the largest owners of office buildings in Manhattan, evoked the writer and thinker Mark Twain: “The news of a New York City real estate death is premature.” He added, “During the past eight months of 2008, we have seen active leasing at our properties. For example, at 1412 Broadway we signed or renewed nine leases totaling 68,000 square feet at market rates. At 1180 Sixth Ave. five new leases have been signed at above anticipated rental rates. We have renewed two retail banking spaces for a total of 24,000 square feet, and the building is 100% occupied. At 1414 Sixth Ave. occupancy remains at 96%. In May 2008, we acquired 1250 Broadway and just negotiated a full-floor tenant at rental rates consistent with our purchase assumptions.”

He added: “If everyone continues to read the obituary pages, you begin to think everyone is dying, and if you only read headlines, you may come to the erroneous conclusion. You cannot look at any financial market during the dog days of summer and get an accurate reading.”

The chief operating officer for the tristate region at Cushman & Wakefield, Joseph Harbert, said leasing through the end of July “is down about 11.5%. There were a lot of larger deals during the first half of the year. Asking prices have continued to go up but taking prices have continued to go down. Neither the up nor the down has been dramatic to date. We are forecasting at this juncture that overall leasing will be off by as much as 15% year-over-year, by the end of the year. Prices will flatten on the asking front and owners will continue to reach for those tenants who are in the market. Asking prices for rents will begin to decline in the fourth quarter, and that decline will continue through the first half of 2009. The imponderables, of course, are the economy and, in particular, job creation.”

An executive director at Cushman & Wakefield, Glenn Markman, said that for small transactions, less than 50,000 square feet, “the market is being driven by lease expirations and not economic growth. Smaller deals are taking longer to complete. There is no sense of urgency. These companies tend to be more nimble because it takes less time to complete a smaller transaction.”

He added: “Large tenants are a different story. In a marketplace as dynamic as New York City, you always have companies moving due to new business strategies, changes in technology, or a CEO’s vision of what is right for the company. Still, economics play a significant role in decision making even with larger tenants.”

Richard Farley, an executive vice president and director of leasing at RFR Realty LLC, one of the largest owners of office space in New York City and Stamford, Conn., said leasing activity “is not quite as volatile as it was six months ago. With more than 98% of our portfolio leased, the rents are remaining stable, while the concession packages for new tenants have not dramatically changed. Overall, we are optimistic that leasing activity will remain healthy through the end of the year.”

One of the largest owners of office properties in the Gold Coast of New Jersey is Mack-Cali Realty Corp. “The Jersey City market is quite healthy and robust,” the company’s president and chief executive, Mitchell Hersh, said. “Given the rent versus cost of occupancy spreads, more New York City-centric firms continue to look at the New Jersey waterfront for opportunities.”

Mr. Sanseverino added that while downtown leasing may be off, “Jersey City seems to be a more attractive market for many companies. Witness the large amounts of space taken there in the last year by companies such as AXA Equitable, BNP Paribas, and Arch Insurance Company.”

The leasing for the downtown office market has been off this year, with the availability rate remaining relatively flat, rising to 9.4% from 9.2% in 2007, according to CB Richard Ellis. A number of large blocks of space are available downtown, in properties such as 100 Church St., 25 Broadway, 77 Water St., and 40 Worth St. Nevertheless, leasing continues to be vibrant at Silverstein Properties’ 7 World Trade Center, where approximately 475,000 square feet of space is available at the top of the building. Industry leaders expect the bank HSBC to conclude negotiations to lease approximately 300,000 square feet, and relocate its headquarters from 452 Fifth Ave.

Downtown Brooklyn has also seen some softening: “In Downtown Brooklyn, there has been a wee bit of the ‘summer doldrums,’ but otherwise the market is chugging along at its usual pace,” the principal at CPEX Real Estate, Timothy King, said. “Brooklyn has always been insulated from much of the vagaries of the Manhattan marketplace, particularly in the office market. To a large extent this is due to the law of supply and demand. Brooklyn is a very mature marketplace, and there has been very little new construction in the office sector since the completion of the MetroTech Complex.”

He added that while “there may be some ‘shadow space’ in MetroTech that could theoretically house a large tenant, it is not being aggressively marketed, and when Weil, Gotshal recently took some space there, it became such big news that Borough President Marty Markowitz held a ‘Welcome to Kings County’ party for them.”

My crystal ball is shining, and I am optimistic, hoping that Mr. Sturner is correct when he says, “Manhattan remains alive and well, we are just resting. Keep the faith.”

Mr. Stoler, a contributing editor of The New York Sun, is a television and radio broadcaster and a senior principal at a real estate investment fund. He can be reached at mstoler@newyorkrealestatetv.com.