May was Manhattan’s best office leasing month since September 2006 as 2.6 million square feet of deals were signed. The amount of space leased represents a 221 percent year-over-year increase which helped lower the current vacancy rate from 11.5 to 11.3 percent. The market continues to stabilize as the overall vacancy rate has dropped for five of the last seven months.
The vacancy rate for class-A space showed the best improvement dropping a full half a point from 12.5 to 12 percent. The drop was the largest since January 2007 and reflects more companies taking advantage of low rates to move into nicer facilities.
Overall rents continue to fall with the average rent for manhattan office space coming in at $54.35/square foot which is down just over one percent from April and 14 percent year-over-year.