When the office leasing market began to collapse more than two years ago, Midtown
Class A landlords fearful of putting out the wrong price in the volatile market pulled back
from listing their asking rents.
Now with the leasing market returning to approximately normal volumes spurred by
sharply reduced prices, more Class A property owners in Midtown are confident enough
to list their asking rents, Robert Sammons, vice president for research at commercial
services firm Cassidy Turley, said.
The firm’s December office report released Monday shows why they are getting more
self-assured. The vacancy rate for Midtown Class A space fell to 10.9 percent in
December, down from 13.9 percent one year earlier, and asking rents were $65.29 per
square foot, up from a recent low of $63.87 per foot in September. (See the full report
Despite the improved attitude, the majority of Class A landlords still do not list their
asking prices. Over the last six years, the high point for the number of landlords listing
their asking rents was in February 2006, when 47.2 percent of the Class A listings had
prices, Sammons said. That fell to a low of 13.1 percent in July 2009, and in December
that had recovered to 24.4 percent, his data show.
More rents are being revealed today since landlords of Class A buildings are “more
confident they can get their price because less space is available,” Sammons
said. “They are thinking the tenant has little choice. ‘I am in the control of the playing
field,’” he said.
For Manhattan overall, the vacancy rate dropped by .3 points to 12 percent from the
prior month and asking rents rose, up $0.09 per foot to $47.66 per square foot, over the
same period last month.
He said the Downtown market remained the weakest, and the report in the New
York Post last month that accounting giant Deloitte might move its entire presence to
Midtown and leave Lower Manhattan behind was another blow.
“Downtown remains a big question mark,” he said. “The Deloitte issue throws a big
kink,” in the market, he said.
For Downtown, compared with November, the vacancy rate in December fell by .1
points to 13.3 percent; for Midtown the rate fell .3 points to 11.6 percent and in Midtown
South, the rate fell .2 point to 12 percent, the report says.
Cassidy Turley Report December 2010