Office market ending 2005 in full recovery mode

Continuing a long run at recovery going back to late 2001, the Manhattan commercial market will likely end 2005 with higher asking rents and lower vacancy rates than when the year started, according to preliminary fourth quarter numbers released Thursday evening by brokerage Grubb & Ellis. All three submarkets Midtown, Midtown South, and Downtown saw vacancy rate declines over the last quarter and increases in average rents.

The overall Manhattan vacancy rate for the fourth quarter was 8 percent, down from 8.9 percent in the third quarter and from 10.5 percent in the same quarter last year. The average asking rent for Class A space in Manhattan, according to Grubb & Ellis, was $58.34 a square foot in the fourth quarter, up nearly $1 on average from the third quarter and more than $3 from the fourth quarter 2004. The average asking rent for Class B space reached $40.51 in the fourth quarter, up from $39.79 in the third quarter and $39.19 in the same period last year. more