Midtown Class A office buildings are seeing vacancies not seen since 1996 as major financial firms continue to unload massive blocks of space, according to a report released today from real estate services firm Colliers ABR.
The vacancy rate for the prime office buildings in Midtown hit 12.2 percent in March, an increase from 11.3 percent a month earlier as firms such as Citigroup, which is offering 300,000 square feet for sublease, dumped space on the market, the report says. The last time the rate was this high was in August 1996, when vacancies hit 12.3 percent, according to the report.
“Midtown continued to bear the brunt of the damage caused by the economic storm,” the firm’s managing director Robert Sammons said in the report.
Overall, the vacancy rate in Class A office space in Manhattan reached 10.8 percent, up from 10.2 percent in February, while average asking rents fell 1.7 percent in March to $69.62 per square foot, the data shows.
In all classes of office buildings, the vacancy rate hit 12.1 percent in March, up from February’s 11.6 percent, and average asking rents fell by $1 to $55.57, the report states.
The Downtown market showed signs of stability, however, as the Class A vacancy rate dipped to 7.5 percent from 7.7 percent, Colliers determined.
In another market study released today, Cushman & Wakefield reported that in the first quarter of 2009 the total amount of sublease space in Manhattan hit 10.3 million square feet, more than doubling the 4.4 million available a year earlier.