Manhattan office space vacancies increase as rents decrease, Colliers determines
November 11, 2008 02:48PM By Adam Pincus
Asking rents in Class A office buildings in Manhattan declined while vacancies rose to their highest level since March 2006, according to Colliers ABR.
Rents were down 5.6 percent to $83.38 from the May 2008 high of $88.37, the data showed. Total vacancies were up 29 percent from the start of the year to 8 percent, or 18.4 million square feet. The last time so much space was available was March 2006 when vacancies hit 18.2 million square feet, the new Colliers data indicates.
Some of the increasing inventory can be attributed to the impending moves by Goldman Sachs to it new headquarters at 200 West Street in Battery Park City and Bank of America to its new home at One Bryant Park, Robert Sammons, managing director of research at Colliers ABR, said at a briefing today.
Sublet space has grown more rapidly, increasing 123 percent since January to 6.8 million square feet, the company reported.
Although the sublet increase was substantial, the total amount did not approach the 11 million square feet recorded for March 2003.
"Sublets are nowhere near as high as they were around 2000 and 2001 after the new media, dot-com implosion. But they are climbing, and climbing fairly rapidly," Sammons said.
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Comments
Anonymous
What I don't understand is that Colliers has a total of 6 brokers, what makes them the indicator of the commercial market.
Comment #1 Posted By: Anonymous 11/11/08
Anonymous
Different Colliers around the country and the world have a different sort of presentation, but you are right, outside of their retail business, Colliers is B rated in NYC.
Comment #2 Posted By: Anonymous 11/11/08
Anonymous
This report understates the extent of Manhattan's vacancies.
Comment #3 Posted By: Anonymous 11/11/08
Anonymous
Their website lists much more than 6 brokers and that only includes brokers at the director level and above. And only 3 are retail brokers, so they must be pretty good if the rest of the company is B rated outside that line of business. If CBRE's stock is tanking and C&W is laying off people, who qualifies as A rated right now in NYC?
Comment #4 Posted By: Anonymous 11/11/08
Anonymous
I totally agree with Comment #4. "who qualiifies as A rated right now in NYC??"
Comment #5 Posted By: Anonymous 11/11/08
Anonymous
Colliers of Midtown is like the Century21 of the residential market here: a big household name around the world, but their market share here is nominal. Another similar scenario is Marcus&Millichap, a company that is dominant outside NYC, but cannot seem to compete here against the likes of MasseyKnackel and EasternConsolidated. HOWEVER, markets like this tend to weaken the bigger competition and give advantage to smaller firms, especially when they have the backing of their global HQ while, CONVERSELY, firms like MasseyKnackel and EasternConsolidated DO NOT HAVE that similar corporate backing. Colliers has talented personnel, so it should not matter how many they have (The Red Coats comes to mind), but how well they perform. That said, Colliers can be trusted to provide the same level of service as “A-rated” companies like Newmark, CushWake, GrubbEllis, Studley, JonesLangLaSalle. If you rate them on market share, however, then they are B or even C-rated. There are many small outfits (sole proprietors) that can do a much better job than that of the big firm competitors just mentioned, but they obviously do not have as much data to provide for assessing the market as this article portrays them of having.
Comment #6 Posted By: Anonymous 11/12/08
Anonymous
Massey Knackel is laying off dozens of brokers, scrambling to restructure and replace top management, being sued in the state supreme court, and potentially facing a federal investigation. So, you may be right that, in this economy, advantage goes to the smaller corporately-owned satellites here in NYC trying to compete.
Comment #7 Posted By: Anonymous 11/12/08