White collar job growth seen key to turnaround.

Job growth in the white collar sector is the key to a turnaround in the Manhattan real estate markets, according-to Cushman & Wakefield managing director Richard Donohue.

"Without an increase in white collar jobs, we can't expect any dramatic improvement in commercial real estate," said Donohue.

In the most recent employment statistics released by the Federal government, the most encouraging news for the New York region was that job losses, listed at 300,000 since 1991, have slowed to a trickle in recent months.

In New York City, 3,258 jobs were lost in the first half of 1993, almost all in the public sector. Jobs held steady in the private sector, however.

"But we have no indications that the job market is about to significantly recover," Donohue said. "For example, on Wall Street, the brokerage firms need far fewer people to execute trades and run operations than they did in the 1980's, due to advances in technology. As a result, although fewer people are employed at these firms, they are doing better financially.

There are some bright spots for New York however. "From an office space perspective, companies are less motivated to move to the suburbs," Donohue said. "Bigger tenants have received significant concessions from landlords and the city, which have helped companies justify remaining in New York."

"Overall, the job losses seem to have stopped," he said, "but we won't see a sustained recovery until the employment picture brightens considerably. With the impact of tax legislation and other national economic issues so uncertain, it's anybody's guess at this point."