The Real Deal New York

Manhattan office market tightens

August 13, 2008 01:30PM
By James Kelly

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After two consecutive quarters of vacancy increases, Manhattan’s office market showed a slight tightening in July from the previous month, according to a market report published by the brokerage Colliers ABR. 

The market’s overall vacancy rate decreased to 8.6 percent, down 10 basis points from 8.7 percent in June. Manhattan’s 8.6 percent vacancy rate represents a 170 basis point increase from 6.9 percent in July 2007.

Class A vacancy showed an even more significant recovery, falling to 6.7 percent in July, from 7.0 percent the month before.

The decrease in vacancy was carried by Midtown South, which saw a 40 basis point decrease to 9.6 percent, down from 10 percent in June.

Midtown’s vacancy remained even at 8.2 percent through June and July, while Downtown’s stayed at 8.6 percent.

Asking rents may be just past their peak, as the average rents for the overall market showed a decrease in July. The average asking rent fell 48 cents to $66.27 per square foot in July, from $66.75 per square foot the month before. The average asking rent in Manhattan is up $6.04, or 9.9 percent, from $60.71 per square foot in July 2007.

Class A asking rents continued to creep up, however, ending at $87.42 per square foot in July, from $87.10 per square foot in June.  

The average asking rent in Midtown fell $1.33 to $79.32 per square foot in July, from $80.65 per square foot in June.

Downtown’s average asking rent crept up 10 cents to $51.34 per square foot in July, from $51.24 per square foot the prior month.

The average asking rent for Midtown South was up 28 cents to $49.63 per square foot, from $49.35 per square foot the month before.

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