Midtown vacancy rates drop, but so do rents, Cassidy reports

By Adam Pincus | June 01, 2010 04:45PM

The office leasing market in Manhattan was mixed last month with a decline in overall vacancy rates that pointed to an improvement but at the same time average asking rents continued to slide lower revealing continued weakness, a new report released today from commercial services firm Cassidy Turley shows.

The May vacancy rate in Manhattan fell to 13.2 percent, a decline of .1 points, while the average asking rent last month declined by 40 cents per foot to $48.42 per square foot, the firm reported in its May Manhattan report (see the full report below).

“In general, for Manhattan overall, the big picture certainly shows improvement, and more than anywhere in Midtown and Midtown South,” Robert Sammons, managing director for research at Cassidy Turley, said. “But Downtown is a laggard.”

In Midtown the vacancy rate fell by .2 points in May to 13.2 percent, with Class A buildings leading the decline, falling .5 points to 13 percent, the report says, with deals such as the 406,000 square feet leased at 11 Times Square.

In Midtown South, the vacancy rate dropped by .7 points to 13.4 percent.

But additional space continued to be returned to the market Downtown, for example Citigroup’s 138,000 square feet at 111 Wall Street, driving the vacancy rate up by .6 points to 10.7 percent, the firm reported.

Average asking rents in Midtown fell by 39 cents per foot to $55.54 per square foot, while in Midtown South, asking rents declined by 33 cents to $39.12 per foot. Downtown, average asking rents fell by 37 cents per foot to $37.94 per square foot, the data shows.

Sammons said the weaker pricing Downtown could lead Midtown tenants to consider the market.

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Manhattan May 2010