Investment firm BHR Capital has signed a five-year lease for 8,800 square feet of office space at 545 Madison Avenue, according to the Observer. The new lease now puts the 140,000-square-foot building on the corner of 55th Street at 50 percent occupied. Although it wasn’t clear how much BHR is paying in rent, landlord LCOR said that rents at the building are now in the mid-to-upper-$70s. [more]

While Manhattan office leasing activity is strong, office rents are just beginning to stabilize nationwide, according to property research firm Reis. Third-quarter data shows that rents fell at their slowest pace in over a year, suggesting that, while vacancies are still around a 17-year high, pricing may be beginning to find its footing, according to Bloomberg News. Average rent per square foot was just 3.6 percent below the amount paid during the third quarter of 2009, which Ryan Severino, a Reis economist, said is encouraging news. “The pace of deterioration has clearly slowed,” Severino said. [Bloomberg]

[more]

Richard Ingwers

Commercial real estate services firm Cushman & Wakefield has
launched a new practice aimed at helping office-dwelling clients [more]

The vacancy rate Downtown rose sharply as Goldman Sachs’ former headquarters building, the 1.1 million-square-foot tower at 85 Broad Street, was officially added as available to the leasing market, commercial services firm Cassidy Turley said in its monthly Manhattan office leasing report released today (click here to see full report).

The vacancy rate Downtown rose by more than a percentage point to 12.2 percent in March from 11.1 percent in February because of the addition, the report says.

The building also drove Manhattan’s Class A vacancy rate to its highest level in 13 years, the report says, reaching 12.8 percent in March. TRD [more]

With declining commercial real estate values, 2010 may prove to be the ultimate year for distressed asset investment nationwide, according to a recent report from financial advisory firm Deloitte. The report, which makes predictions for the market for the next year and a half, says that hotel and multi-family residential markets may be among the first kinds of commercial real estate to bottom out and recover, particularly if employment figures begin to improve in 2010. New York, in particular, might see a quicker turnaround in the office market, according to the report, in part because of recent hiring upticks in the investment banking sector. TRD

When it comes to commercial real estate investments, Lee Neibart, Area Property Partners chief executive, said it’s too early to be gung-ho about office space. While multi-family buildings and hotels are good opportunities to pursue with caution, Neibart told the Observer that office investments are still too shaky for his taste. “The office market, as far as we’re concerned, continues to have declining rents and increasing expenses, and we’re still concerned with retail,” Neibart said, adding that those segments of the market “would have to stabilize” before Neibart would consider reinvesting.

Downtown Brooklyn office real estate is suffering, according to Crain’s, with just three deals inked last year for 30,000 square feet of space or more. With lowered Manhattan rents putting up a fight and tenants looking to streamline their space, the Downtown Brooklyn market is hurting — and it’s tough to tell when it might rebound, according to Chris Havens, CEO of Creative Real Estate Group in Brooklyn. “The market is a mixed picture, with a vacancy rate that is lower than almost any major office market in America, but it’s a very slow-moving market,” Havens said.

According to Colliers ABR report for June, vacancy rates for Class A office
space in Manhattan
saw a decrease of 10 basis points for the first time in a year. Also, the
average asking rent increased for Class A space, jumping a modest $0.14 to
$65.57 per square foot. However, the report, released today, also notes that
these signs of improvement for the commercial sector could be slowed by the
struggling larger economy and housing market. Factors including low consumer
spending rates, the still high unemployment rate, and the high risk of
commercial mortgage defaults, may all be a drag on the commercial real estate
market in coming months, specifically the office space sector, according to the
report. Also, big blocks of space in Lower Manhattan
may return to the market soon, which will raise vacancy rates even higher, the
report says. TRD

Manhattan office taking rents have fallen by as much as 40 percent from
the second quarter of 2008 to the same period in 2009, commercial real
estate firm FirstService Williams says in a report issued today. While
the survey showed average asking rents in Manhattan were down 26
percent quarter-over-quarter, to $58.52 per square foot from $79.39 per
square foot, the taking rent fell even more. “Our measures of
taking rents indicate that the average may be down in the range of 35
percent to 40 percent over nearly the same time period,” the report
says. But the survey also says there were signs of improvement. more
[more]