Manhattan leasing volume dipped in January

By Adam Pincus | February 10, 2010 03:45PM

The volume of new office leasing in Manhattan slipped last month from the 12-month high seen in December but was twice what was recorded in the same period a year ago, a new report released yesterday by commercial firm CB Richard Ellis shows (see full report below).

For Manhattan overall, the 1.94 million square feet leased in January was 12 percent lower than in December, but was more than twice the level recorded in January 2009, when just 920,000 square feet was leased, the report says.

The volume of leasing has been cited as an important indicator of stability in the marketplace, because, brokers say, tenants are more comfortable taking space at current pricing levels.

The leasing volume dropped in all three Manhattan markets in January, but fell the most in Midtown. Meanwhile, in Midtown South there were positive signs for landlords as rental rates rose significantly and vacancy rates fell last month.

In Midtown, the leasing volume fell 14 percent to 1.37 million square feet, while the average asking rent barely budged, rising 5 cents to $56.07 per square foot. The vacancy rate dipped a modest .1 point to 10.4 percent.

In Midtown South, leasing volume was nearly unchanged, at 310,000 square feet. But it was the only market to see a large increase in average asking rents, which rose by $1.13 per foot to $41.66 per square foot, while the vacancy rate dropped sharply by .5 points to 9.9 percent, the data shows.

And Downtown, leasing activity fell slightly to 250,000 square feet, while average asking rents dropped by 47 cents to $37.65 per square foot. The vacancy rate rose modestly by .2 points to 7.8 percent, the figures indicate.

February 2010 Snapshot