Manhattan office asking rents rise in slow market

February 08, 2012 12:30PM

Asking rents in the Manhattan office leasing market continued to rise in January while vacancy rates tightened, even as total activity appeared to slow from last year’s overall brisk pace, data from commercial services firm Cassidy Turley shows.

“It certainly seems slower than normal, but some major deals were done,” Robert Sammons, vice president for research at Cassidy Turley, said.

Yet the overall market remained buoyant enough to raise the asking rent and push down vacancy rates in all three Manhattan markets, Midtown, Midtown South and Downtown.

The average asking rent for Manhattan overall was $52.06 per square foot, which was up 1.3 percent from the prior month, and the highest level since June 2009 when it was $52.78 per square foot. The Manhattan vacancy rate tightened last month to 10.3 percent, down from 10.9 percent in December, and down from 12.1 percent in January 2011.

Midtown asking rents rose over the past year, and continued that trend in January. They were up to $59.30 per square foot, a $0.62 per square foot increase from December, and a 6.3 percent increase from $55.75 per foot in January 2011.

Midtown South saw the largest percentage increase in asking rents over the last year, among Manhattan’s three markets. Asking rents reached $43.13 per foot last month, a 12.8 percent increase from January 2011, and up $1.22 per square foot from December 2011.

Meanwhile, Downtown asking rents ticked up slightly in January. The average asking rent in Lower Manhattan was $38.25 per foot, up $0.26 per foot from December, and up just 1 percent year-over-year. — Adam Pincus