Kenneth McCarthy of Cushman

Office leasing activity cooled in Midtown from the brisk levels seen over the previous months, but overall in Manhattan, the vacancy rate and average asking rents improved in Aug [more]

Average asking rents in Manhattan fell in April even as the vacancy rate declined on the heels of high leasing activity, a new report covering office leasing from commercial services firm Cushman & Wakefield shows.

The average asking rent in Manhattan fell by 40 cents per foot in April to $54.98 per square foot, even as the vacancy rate fell by .1 points to 11.5 percent, the company reported.

Leasing volume was high in the past two months. Activity in the two months of March and April has been the highest since June and July of 2007, Cushman reported. [more]

Lower Manhattan, the country’s best-performing office market, is struggling to hang on to its title as vacancies mount. Though the Financial District fared relatively well during the commercial property slide, demand is no longer keeping up with increasing inventory. Goldman Sachs, American International Group and Bank of America are among the major tenants relocating, which follows the flight of firms like Lehman Brothers after Sept. 11, 2001. Goldman Sachs is moving to its new West Street building and vacating 2 million square feet offices including 85 Broad Street and 1 New York Plaza. AIG last year sold its 70 Pine Street and 72 Wall Street headquarters. Bank of America, meanwhile, is moving its employees into a new Midtown tower at One Bryant Park, and it remains to be seen what will happen to the World Financial Center offices of Merrill Lynch, which it acquired last year. Cushman & Wakefield expects Lower Manhattan’s vacancy rate to hit 14 percent by late next year — the highest since 1997 — and the 4.4 million square feet of office space planned for the two new towers going up at the World Trade Center isn’t helping that metric. “The amount of space that’s potentially going to come to the market will increase availabilities and put pressure on pricing,” said Kenneth McCarthy, who heads New York-area research for Cushman & Wakefield. [Bloomberg]

Following a two-month rally in office leasing volume, the number of square feet leased in August fell by half, according to new data in a monthly report (see report after the jump) from real estate services firm Cushman & Wakefield.

Office leasing volume fell by more than 50 percent in August compared with July, when 2.1 million square feet was leased. Just 1 million square feet was leased in August, the firm’s managing director and head of research, Kenneth McCarthy, said.

“We are a bit concerned about that. I do think there is a sense in the marketplace that there is activity out there. Maybe this was an unusually slow August. But overall it was a bit of a setback after two fairly healthy months,” he said. [more]