Cushman’s Boston Office
The credit crisis has claimed a handful of jobs at the Boston office of Cushman & Wakefield, the region’s second largest commercial estate firm.
Martin Nee, a company spokesman, said the privately-held firm will not disclose exact numbers. But a source within the company said seven of its 100 employees in Boston were terminated.
“It’s minimal,” the source told Banker & Tradesman. “It’s not like there have been 20 people cut in Boston. But there could be more cuts if market conditions don’t improve.”
Gus Faucher, director of macroeconomics at Moody’s Economy.com, an independent provider of economic research, said he is not surprised by the layoffs.
“Leasing activity is down, jobs losses are on the rise and office building construction is grinding to a halt as deals dry up amid the credit crunch,” he said. “I expect more bad news from the nation’s commercial real estate industry before things turn around.”
Barry Bluestone, dean of the school of Social Science Urban Affairs and Public Policy at Northeastern University, said if interest rates and inflation are low and the new president implements a strong stimulus package in January, the nation could start coming out of the recession by summer.
“If everything goes right, we could see things improve – including in the commercial real estate market – a year from now,” he said. “The depth and speed of the recovery will have a lot to do with federal policy.”
Delivering Bad News
At Cushman & Wakefield, employees were told last week that in addition to some layoffs, salaries would be cut for high-level employees in addition to other benefit cuts, the source said. The global real estate firm employs 15,000 people worldwide, including about 6,500 in the United States.
Thomas Collins, Cushman’s regional manager, declined to comment.
News of the cutbacks comes as a study of institutional investors found the interest for investing in commercial real estate is on the rise. The survey of decision makers at large pension funds, financial institutions, endowments and foundations revealed that 60 percent of the respondents noted their mandate for real estate is growing.
When asked to rank their top choice of sectors to invest in commercial real estate, 44 percent chose North America, 30 percent selected Asia and 18 percent named Europe.
“It is encouraging to learn that despite the current turmoil in the overall financial markets, investor appetite for commercial real estate continues to grow,” said Michael E. Pralle, president and chief operating officer of J.E. Robert Cos., in a prepared statement. “JER has been through volatile cycles before and we understand how to operate in both good times and bad. Investor confidence in the commercial real estate sector is in line with our forward-looking perspective overall.”
