Richard Bernstein, vice chairman at Colliers ABR

The vacancy rate for Midtown office buildings hit its highest level in
more than 15 years last month, fueled in part by several large blocks
of space that were placed on the market, a new report released
yesterday by commercial services firm Colliers ABR shows. But overall Manhattan data was mixed, showing some strength in the
Midtown South market where the vacancy rate declined modestly and
prices rose for Class A office space, the report indicates. The Midtown vacancy figure reached 14 percent, its highest level since
March 1994 when the rate reached 14.1 percent, the report covering
October says. Asking rents also fared poorly in the district, falling
1.2 percent to $58.16 per square foot. In a positive sign, the vacancy rate for all classes of buildings in
Midtown South fell .1 points to 14.1 percent and the average price for
Class A office space rose by $1.36 per square foot to $50.88 per foot.
But for all classes of buildings in the district, the average asking
rent fell by $0.48 per foot to $39.88 per square foot. more

Source: Colliers ABR

[more]

From left: Worldwide Plaza, Peter Duncan

Real estate investor Peter Duncan, who scored a deal on the 49-story Worldwide Plaza building in July, now has the chance to shape the New York commercial real estate market’s investment landscape. Duncan, who is president of George Comfort & Sons, purchased the property at 825 Eighth Avenue for $590 million, roughly a third of what Harry Macklowe paid for it in February 2007. The price means Duncan might be able to lease out the first 14 floors, which stand vacant as the second-largest empty space in the city, for as little as $30 or $40 per square foot, according to Robert Sammons, research director at Colliers ABR. Whereas Midtown office buildings have had a rough year — CB Richard Ellis Group reported that there have been no single leases in the area for more than 250,000 square feet — low prices may hasten leasing activity for the space in Duncan’s building formerly occupied by advertising firm Ogilvy & Mather. That could, in turn, encourage other investors to take on risk in buying up more New York office buildings, said Jim Frederick, also of Colliers.
[Bloomberg] [more]

From the October issue: As commercial buildings change hands and landlords seek to squeeze more
profit out of their properties, full-service brokerage firms are
sharpening their knives for what insiders believe will be a feeding
frenzy for new office leasing opportunities. A building’s leasing agent — a firm such as CB Richard Ellis or
Cushman & Wakefield — represents the landlord in leasing
negotiations, and such contracts often are packaged with overall
building management. Unlike the residential new development condo market, where buildings
change marketing agencies frequently, most agents at commercial
buildings remain in place at a building for years with very little
turnover, records show.

Residents have begun to close and move into units at K. Hovnanian
Homes’ 420-unit development 77 Hudson. Also, the Forward Association, the non-profit Jewish organization that publishes the Forward newspaper, now has completed digs at 125 Maiden Lane. The Community Preservation Corporation and the city have provided a $7.6 million
in construction loan for renovations at two buildings in Washington Heights. Four RSS
(Really Simple Syndication) feeds will be available on the Department
of City Planning’s Web site. And, full-service commercial real estate services firm Collier’s ABR has negotiated a 5,611-square-foot lease for a software company. Comments

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Manhattan office vacancy rates rose and asking rents fell in July after
a relatively stable June, according to a monthly office market report
from Colliers ABR released today. The Class A vacancy rate in Manhattan rose to
12.1 percent, the highest rate since June 1997. The increase in the Class A
vacancy rate was due to a rise in space available for direct lease, even as
the amount of sublease space on the market actually fell. Class A asking rent dropped
2.1 percent to $64.22 per square foot from $65.77 per square foot in
June. In Midtown, the vacancy rate rose to 13.7 percent, and was over
15 percent in the Plaza and Grand Central submarkets. The vacancy rate
hit 13.9 percent in Midtown South and 8.4 percent downtown, all
increases from June. While July saw several noteworthy leases and
renewals, most were for the same amount of space or less than the
tenant already held, according to the report. TRD

D.C. lobbying and law firm Patton Boggs has doubled its New York office
at the Stevens Tower, at 1185 Avenue of the Americas. The firm has
subleased 60,000 square feet for five years, with the possibility of
extending the lease. SL Green owns the 42-floor building. Colliers
ABR’s Richard Bernstein represented King & Spalding, who offered
the space, and Newmark Knight Frank’s Mark Weiss represented Patton
Boggs. [more]

Source: Colliers ABR

While commercial leasing activity has picked up in the past few months,
according to Colliers ABR’s Manhattan May office report (see report on jump), the city’s
Class A vacancy rate increased and average rents fell last month. The vacancy rate of Class A space in Manhattan reached 11.9 percent in
May, up from 11.3 in April. Class B and Class C availability also
increased last month, pushing the overall Manhattan vacancy rate to
13.1 percent, its highest level since reaching the same rate in
December 1996. Meanwhile, the average asking rent for Class A space
fell to $65.43 per square foot in May, down 4.9 percent from $68.83 a
foot a month earlier. TRD [more]

Despite the slowdown in the commercial market, some small and mid-sized
firms are hiring more brokers and expanding, intent on challenging the
industry’s leaders when the market turns up. The smaller firms are
taking advantage of the situation faced by large companies like CB Richard Ellis, Jones Lang
LaSalle and Cushman & Wakefield, which all lost money in the first
quarter, by pointing out to prospective clients that they can offer
more personalized services. FirstService Williams in Manhattan has
already hired nine more employees this year, and Colliers ABR is in
talks to add a capital markets team and property management executive. [more]

Industry sources told the Observer that bidders on AIG’s two downtown
skyscrapers are pricing the towers at about $100 per square foot. That puts the value of AIG’s 70 Pine Street at $77.4 million, and 72 Wall
Street about $32.5 million. Sources said AIG will likely close a deal
with one of the bidders in the next few weeks. According to Robert
Sammons, managing director of research at Colliers ABR, the AIG transactions
would mark the first major tower sales in Lower Manhattan since January
2008, when 156 Williams Street sold for $60 million — or $238 a foot
– and would indicate how far values have fallen. Some commercial
market experts say the fact that people are looking to buy the AIG buildings
shows confidence in the market, while others say the lowball bids
underscore deep problems in the Financial District.
[more]

From the May issue: Anecdotal metrics such as space inspections,
inquiries and offers indicated that commercial real estate activity was
up in the past month, compared to a near-standstill in December and
January, brokers said. But the number of leases signed remained low. “I
have seen more leasing activity in the last three weeks than I did in
the preceding three months,” David Hoffman, executive managing director
at full-service brokerage Colliers ABR, said in late April. But he
added, “It is not a very quick process. I can’t say in the last three
weeks we have signed a lot of leases.” Cory Abdo, a tenant
representative broker and executive vice president at Winoker Realty,
saw a similar trend. [more]