The Real Deal New York

Vacancy rates creep up in Manhattan

October 15, 2008 03:15PM
By Adam Pincus

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Vacancy rates rose across Manhattan’s three main office markets in September, when Wall Street was battered by a credit crunch that nearly brought commercial lending to a standstill.

At the same time, average asking rents fell in two of the markets, according to a report from CB Richard Ellis covering September data, released today.

Leasing activity rose or remained flat in the districts, with the largest lease renewal to Macquarie Equities USA for 258,335 square feet at 125 West 55th Street. There was no other lease written greater than 50,000 square feet in any of the three districts — Midtown, Midtown South and Downtown.

The overall vacancy rate in Manhattan rose to 6.1 percent from 5.8 percent a month earlier, CBRE data showed. The district that saw the steepest rise was Midtown South, where the rate was up .8 points over August, to 7.1 percent. In Midtown, the rate was up .2 points to 5.4 percent and Downtown the rate rose .1 points to 7.4 percent.

“Downtown has seen a significant increase in sublease space so far in 2008, with total available sublease space more than doubling, from 930,000 square feet at the beginning of the year to 2.21 million square feet in September,” the report said.

Average rents in Midtown fell $1.34 to $84.74 compared to August; in Midtown South the average fell $.51 to $52.86; and Downtown it rose $.18 to $50.35, according to the CBRE data.

Compared to August, leasing activity rose in Midtown to 940,000 square feet; in Midtown South it remained flat at 110,000 square feet; and Downtown, activity rose to 160,000 square feet.

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