As the vacancy rate for Manhattan Class A office space continues to drop, landlords are trying to see how far they can push up asking rents, according to Crain’s. They are holding back on their most sought-after properties in order to achieve higher rents.

According to recent data from Cassidy Turley, the Class A vacancy rate dropped to 10.8 percent for June, down a full percentage point from the same period last year. Yet, the number of buildings with zero vacancies dropped — from 48 to 42. Only 23 Midtown office buildings are now fully occupied, Crain’s said.
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Though the commercial real estate market nationwide is stabilizing, most market-rate rents will remain soft except in the multi-family sector, according to the National Association of Realtors. Lawrence Yun, chief economist at NAR, said that a pullback in construction is helping stabilize the market. “Very limited construction of new commercial real estate over the past few years has essentially fixed the supply of available space,” he said. “This means vacancy rates could fall quickly from any increase in demand for commercial space.” TRD [more]

The U.S. economy is poised for major acceleration in employment growth, with 3.2 million jobs projected to be added in the next 12 months, according to Cushman & Wakefield’s Economic Pulse regional reports, which provide a 2011 outlook for commercial real estate in the Americas, Europe and Asia Pacific. The projected acceleration in job growth in the U.S. will have major implications for all major sectors of the commercial real estate market, with office, industrial, retail and multi-family markets to benefit. In an environment of economic growth and declining vacancy rates, it is likely that rents will stabilize in 2011 and may begin to rise, particularly in markets that are tighter than the national average, the report says. TRD [more]

The commercial office market improved in the final quarter of 2010, in
both Fairfield and Westchester counties, according to a Jones Lang
LaSalle report released today. Strong leasing activity in both office markets helped
fuel overall vacancy rate decreases, the report shows. The overall
vacancy rate in Fairfield Country dropped to 22.7 percent in the fourth
quarter of 2010, from 23.2 percent in the third quarter of 2010. “Given
the recent improvement in office market fundamentals and a more positive
overall economic outlook, it is likely the office market will continue
to achieve a more balanced state during the next 12 months,” said Robert
Ageloff, international director and head of JLL’s Stamford office. TRD Comments

Overall vacancy rates in Manhattan declined in November to 12.3 percent, from 12.4 percent in October, according to a monthly market report released today by Cassidy Turley. The decrease was thanks largely in part to a number of smaller transactions in the Midtown South market, which saw strength across most of its submarkets, with vacancy rates falling to 12.2 percent from 12.8 percent. The reports also shows that the average asking rent in Manhattan saw a small boost last month, rising to $47.57 per square foot, from $47.23 in October. TRD [more]

National vacancy rates in the third quarter of this year were 10.3 percent for rental housing, a .8 percent year-over-year decrease from 2009, according to data released today by the U.S. Census Bureau. The vacancy rate was 2.5 percent for homeowner housing, a .1 percent year-over-year decrease from 2009, and a .3 percent decrease from last quarter. In the third quarter of 2010, approximately 85.6 percent of housing units in the United States were occupied and 14.4 percent were vacant. Owner-occupied housing made up 57.3 percent of total housing units, while renter-occupied units accounted for 28.3 percent of the inventory. TRD

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Vacancies at U.S. shopping centers rose in the third quarter, to 10.9 percent from 10.3 percent a year earlier, according to Reis, a New York-based property research firm. Vacancies were unchanged from the second quarter, when they reached the highest level since 1991. The high vacancy rate can be attributed to falling consumer confidence and unemployment, which, at close to 10 percent, stayed near a 26-year high, Bloomberg News reported. The index of consumer confidence fell to 48.5 last month, the lowest level since February, according to the Reis data. “Even if we see a resumption in consumer confidence and a rise in retail spending, retail properties typically lag recoveries by anywhere from 12 to 18 months,” Victor Calanog, director of research at Reis, said in a statement. [Bloomberg]

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From the September issue: New York City has long been a town where a shopper can turn the corner
from a bustling retail district, walk a block or two, and enter a
retail ghost town.
Now, as the Great Recession sends vacancy rates in Brooklyn and
Queens skyrocketing — toward 15 percent by year’s end, according to
Marcus & Millichap estimates — this contrast between blocks
chock-full of retail and blocks down on their luck is growing ever more
marked. Even within the overall depressed market, certain blocks and types of retailers are taking it on the chin. Mom-and-pop stores in mixed-use buildings with retail on the ground floor and apartments above are suffering. Some low-income areas in Brooklyn that headed into the recession on
shaky footing are getting socked, too, with vacancies estimated at
stunning levels of 25 to 40 percent by Marcus & Millichap, compared
to 12 to 18 percent vacancy rates in 2008. [more]

The flood of sublease space on the market may be receding, Crain’s
reported. The vacancy rate for sublease space fell to 2.8 percent in
August, down from 3 percent in July, according to Cushman &
Wakefield. It was the first drop in 17 months. The proportion of
available commercial real estate that is sublease space has also
dropped. In August, 25.9 percent of vacant office space was sublease
space, down from 28.2 percent in April. [more]

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