Manhattan office rents decline for first time since ’05

 
In a sign that Manhattan’s office market is well past the peak of its rent cycle, average asking rents in the borough declined for the first time since 2005 in the second quarter, according to a market report from the brokerage Studley.

Average rents fell by 2.2 percent to $69.29 per square foot, according to the report, while office space availability increased to 8.2 percent.

Submarkets with higher quality space showed steeper declines in rent – rents in The Plaza District fell 5.5 percent to $122.22 per square foot.

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Leasing activity dropped 15.5 percent from the first quarter to 6.5 million square feet in the second quarter. In one of its biggest slowdowns, leasing activity in Downtown fell 36.6 percent to 1.4 million square feet.

The 8.3 million square feet of available sublet space in the borough represented 25 percent of total available space, the report said.