New Manhattan office leasing volume in the first quarter reached its highest level in four years but the total vacancy rate continued to climb with the addition of new available space to the market, commercial firm Cushman & Wakefield reported in a first-quarter briefing this morning.
There was 5.6 million square feet in new leases, which excludes renewals, in the first quarter of 2010, nearly doubling the 3.1 million square feet from the same period in 2009 and the best quarter since 5.9 million square feet was taken in the first three months of 2006, Cushman reported.
With the addition of new space at 11 Times Square in Midtown and 85 Broad Street Downtown, the overall vacancy rate went up. The vacancy rate for Class A buildings in Midtown’s Times Square South submarket shot up to 27 percent last quarter from 14 percent in the fourth quarter of 2009 because of the addition of SJP Properties’s 1.1 million-square-foot 11 Times Square.
For Manhattan overall, the vacancy rate rose to 11.6 percent in the first quarter from 11.1 percent in fourth-quarter 2009, and average asking rents fell 14 cents in the last quarter to $55.38, Cushman reported.
“We think the rents have stabilized. It is really time for people to think … about getting back into the market and doing a deal before those things reverse themselves and things get worse for tenants,” Joseph Harbert, COO for the company’s New York region, said.
The taking rents for Midtown Class A properties are down more than 47 percent from the first quarter of 2008, the company reported.
The firm also reported that the retail leasing market improved slightly in the first quarter, with availability rates mostly dropping and average asking rents rising in most areas.
The availability rate fell in six of seven submarkets, only rising in Upper Fifth Avenue to 4.9 percent in the first quarter from 3.3 percent in fourth-quarter 2009. But it remained down from 6.6 percent in first-quarter 2009, the firm reported.
Average asking rents rose in five of the seven Manhattan markets including Upper Fifth Avenue where rents rose to $2,033 per foot last quarter from $2,000 per square foot in the fourth quarter of 2009.