Manhattan taking office rents off 40% in 2Q

By Adam Pincus | June 29, 2009 12:07PM

Manhattan office taking rents have fallen by as much as 40 percent from the second quarter of 2008 to the same period in 2009, commercial real estate firm FirstService Williams says in a report issued today.

While the survey showed average asking rents in Manhattan were down 26 percent quarter-over-quarter, to $58.52 per square foot from $79.39 per square foot, the taking rent fell even more.

“Our measures of taking rents indicate that the average may be down in the range of 35 percent to 40 percent over nearly the same time period,” the report says.

But the survey also says there were signs of improvement.  

While the main data tracking the health of Manhattan’s office market continued a downward trend in the second quarter of 2009, the amount of space returned to the market declined in the second half of the second quarter.

“Net additions to the supply of space in the latter half of the second quarter fell to approximately one-half the level we witnessed only a month earlier,” the company’s CEO Mark Jaccom said in the report.

In the three months ending June 30, average asking rents in Manhattan fell to $58.52 per square foot from the first quarter’s figure of $65.18 per square foot, and were down 26 percent from the same period a year ago when rents averaged $79.39 per foot.

The availability rate rose to 13.4 percent, up from 12 percent in first-quarter 2009 and 9 percent in the second-quarter 2008. Net absorption also went further south between April and June, reaching 4.7 million square feet, up from a negative 3.9 million in the first three months of the year and a negative 2.2 million square feet in the second quarter of 2008, the report says.