July’s leasing data was a mixed bag as Midtown continued to stabilize and Downtown continued to slide. Overall Downtown’s woes were enough to drag the entire market lower and when combined with recent economic developments, the area could see even lower rents as firms relocate to Midtown and more space comes online.
Midtown and Midtown South Class A vacancies dropped from 12.4 percent to 12 percent and 9.8 to 9.4 percent respectively. Using general market paramaters, Midtown South’s class A vacancy rate is getting closer to shifting the negotiation balance from tenant to landlord.
Downtown saw Class A vacancies jump 17 percent from 10.6 to 12.4 percent with more than one million square feet of space coming online from a pair of 500,000+ blocks at One New York and 70 Pine Street. Downtown’s total commercial vacancy rate rose to 15.2 percent representing a 2.7 percent increase year-over-year.
Average asking rents declined slightly as it appears they are reaching the bottom with a 15 cent decline to $43.62.