Manhattan market declines continued in 1Q

New York /
Mar.March 30, 2009 12:17 PM

There were no surprises in the Manhattan commercial real estate market in the first quarter of this year, according to Mark Jaccom, CEO of FirstService Williams. The market continued to decline, with the availability rate rising to 12 percent, up from 10.9 percent at the end of the fourth quarter of 2008, according to a first-quarter report from the commercial real estate firm released today.  

“Large financial institutions that are major users of space in the city had earlier announced both employment reductions and goals to utilize less space per employee,” so the higher availability rate isn’t unexpected, Jaccom said.

The average Manhattan asking rent declined to $65.18 per square foot in the first quarter from $74.49 per square foot in the last quarter of 2008, a 12.5 percent drop quarter-over-quarter and a 17.9 percent decline from the rent peak in the second quarter of 2008.  

The increase in sublease space on the market has been a strong factor in the rent drop, according to the report. Now, 25 percent of available office space is for sublease, up from under 20 percent in the first half of 2008.

What the report refers to as the Midtown North submarket is leading the downturn, with an availability rate of 13.3 percent at the end of the first quarter, up from 7.2 percent in the second quarter of 2007. Last week, Jones Lang LaSalle reported a 13.5 percent vacancy rate for all Midtown Class A office space in the first quarter. TRD


Related Articles

arrow_forward_ios
270 W Montauk Hwy, Hampton Bays, NY (Loopnet)
Legendary Hampton Bays bar up for sale
Legendary Hampton Bays bar up for sale
Prologis Chairman and CEO Hamid Moghadam (Getty, Prologis)
Industrial space “effectively sold out” amid leasing frenzy, Prologis says
Industrial space “effectively sold out” amid leasing frenzy, Prologis says
Starwood raises $10B for distressed real estate plays
Starwood raises $10B for distressed real estate plays
Starwood raises $10B for distressed real estate plays
Aulder Capital CEO Jonah Bamberger and 162-164 East 82nd Street (Rosewood Realty Group, Slate Property Group)
Two Upper East Side apartment buildings head to foreclosure sale
Two Upper East Side apartment buildings head to foreclosure sale
Stripes founder Ken Fox and a rendering of 40 10th Avenue (Stripes, Neoscape)
Private equity firm carves out 14K sf at Aurora’s Solar Carve building
Private equity firm carves out 14K sf at Aurora’s Solar Carve building
Resurrection! Work resumes on stalled Clinton Hill residential project
Resurrection! Work resumes on stalled Clinton Hill residential project
Resurrection! Work resumes on stalled Clinton Hill residential project
CRE held up through the pandemic far better than most expected (iStock)
How commercial real estate survived the pandemic
How commercial real estate survived the pandemic
Harbor Group grabs $558M in financing for Black Rock purchase
Harbor Group grabs $558M in financing for Black Rock purchase
Harbor Group grabs $558M in financing for Black Rock purchase
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...