Manhattan’s office vacancy rate dropped 0.8 percent from 11.6 to 10.8 percent between Q1 and Q2 as more businesses are starting to take advantage of a heavily pro-tenant market.
Businesses took advantage of landlord concessions and low rates to lease 6.9 million square feet of space and as a result leasing activity was the highest since the third quarter of 2006. Even with the surge in leasing, rents continued to fall with average asking rents dropping nearly 2 percent.
Midtown benefitted the most from the uptick in leasing activity especially with Class A space, however vacancy rates rose in downtown as more space came online and tenants shifted to Midtown.