Affordable office space in Lower Manhattan is running out.
As technology, media and fashion companies are moving in, the area is seeing a swift decline in availability of Class B and C office space, according to a report by brokerage Studley.
Last month, 4.3 million square feet of Class B and C office space was available, according to the report. That’s about 45 percent less than in 2011.
Meanwhile, more high-quality, expensive office space is opening up, including the new skyscrapers at the World Trade Center site.
According to a separate report by Studley, the availability rate of Class B and C offices in downtown Manhattan fell to 8.7 percent at the end of the first quarter, compared to 15.2 percent for that same period in 2011, Bloomberg reported.
Heidi Learner, Studley’s chief economist, told Bloomberg that tenants can expect higher rent as the downtown market gets tighter.
“The early-bird tenants have largely taken the best stock,” Learner told Bloomberg.
Those who are still looking to move their business downtown, she continued, “are going to be forced to go into a little higher-quality space and pay up for it, while realizing that what they’re paying is still significantly less than what they’d be paying in either Midtown or Midtown South.” [Bloomberg] — The Real Deal staff