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Signs of improvement for office market

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