The Real Deal New York

Companies expand, U.S. office vacancy hits lowest level in two years

July 08, 2011 09:13AM

Office building vacancy in U.S. central business districts decreased to the lowest level in two years as companies expanded, according to a report by Cushman & Wakefield, reported by Bloomberg News.

“It’s a reflection of the pent-up demand in the market,” Maria Sicola, head of Americas research at Cushman, told Bloomberg News. “Economic growth has been slow, but we are growing.”

The average vacancy rate in the second quarter was 13.9 percent, Cushman said, down from 14.6 percent in the first quarter and 14.8 percent for the same period a year ago. The rate last was lower in mid-2009, when it was 13.7 percent, the New York-based brokerage said.

U.S. companies hired twice as many employees as was predicted, according to data from ADP Employer Services. Since January, leases for 41.8 million square feet have been signed, making it the most robust half-year in 13 years.

Manhattan, Chicago and San Francisco all experienced second-quarter growth. Midtown Manhattan maintained the lowest vacancy rates, 7.2 percent, and highest average rents, $63.35 per square foot, in the 30 central business districts surveyed.

Last month, it was reported that at least eight high-profile financial institutions are actively seeking large blocks of space in Manhattan, of at least 500,000 square feet each. Firms looking include Bank of America, UBS AG and investment bank Jeffries Group. [Bloomberg]

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