New York is posting strong job growth, which is necessary to a commercial real estate recovery. But there is nearly 18 million square feet of office space in Manhattan that is sitting empty after layoffs and consolidations that is not part of the market's official vacancy rate, according to CoStar. Before they opt for new space, tenants will backfill these empty offices, thus postponing the sector's recovery. "There's no doubt that shadow space is going to mute a recovery," says Robert Freedman with Colliers International.
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