The Manhattan office market is showing signs of slowing down as landlords put more space on the market than tenants took — the first time that’s happened since the first quarter of 2013.
In the first quarter of this year, 6.6 million square feet was leased, a decrease from 7 million square feet during the first quarter of last year, according to Cushman & Wakefield data.
Around 806,000 more square feet of office space was put on the market than was leased, Bloomberg reported.
In 2014, office leasing hit a high with a total of 32.8 million square feet, the most since 1998, according to the Cushman data.
Midtown’s overall vacancy rate increased quarter-over-quarter to 9.3 percent from 8.8 percent, the data shows.
In February, Midtown office rent dropped with tenants paying 7.4 percent less than they did at the end of last year. Midtown, which has faced increased competition from boutique office space in the Meatpacking District and upcoming developments such as Hudson Yards, has been cutting rents to keep and attract tenants.
Vacancy rate in Midtown (Credit: Cushman & Wakefield)
The Real Deal reported that real estate investment trusts focused on office space — SL Green Realty, Vornado Realty Trust and Boston Properties — have struggled to deliver positive returns. [Bloomberg] — Dusica Sue Malesevic