Midtown in black and white

Strong Midtown Growth Sees Office Availability Fall in January

Posted on February 24, 2013 ยท Posted in Leasing

Manhattan’s office availability rate dropped to 11.4 percent in January as sustained job growth and improving economic conditions led to a positive net absorption of just over 464,000 square feet. It should come as no surprise that Midtown was the biggest driver with six of the nine submarkets posting positive absorption of more than 40,000 square feet and even the much maligned Downtown area saw tenants take an additional 260,000 square feet.

Midtown has seen a flurry of leasing activity and the availability rate dropped 0.2 percent to 11.6 percent. This has driven average Class A asking rates to $78.60 and Class B rates jumped 19 percent, yes 19 percent to $49.99. Downtown gave commercial real estate observers the biggest ray of hope with the availability rate dropping to 13 percent (mainly due to a large lease from publisher HarperCollins.

Lower Manhattan is going to be under heavy pressure in the coming year as an addition 3 million to 3.5 million square feet come online with the completion of the new World Trade Center towers and rents over the next year will likely fall as a result.

The lower availability rate saw average asking rents jump to $61.16 per square foot and that trend should continue so long as the economy continues to grow and the financial sector improves.

The data clearly shows the time to act is now and if you’re business is currently looking for space or will need to move in the next 9-12 months, it’s never too early to contact our tenant advisors and get the ball rolling. Don’t get stuck paying higher rates for office space.