Average asking rents in the Manhattan office market jumped 6.3 percent year-over-year to $67.62 per square foot, while the availability rate fell to 10.7 percent, according to new research from commercial brokerage Colliers International.
It was the eighth consecutive quarter of an increase in asking rents, but leasing activity was down significantly year-over-year. About 8.3 million square feet of lease deals were signed in the quarter, a 30 percent drop from the 11.9 million square feet of deals during the same period last year.
In Midtown South, the availability rate fell to 7.7 percent– the lowest since 2008 — and average asking rents hit a record $62 per square foot, according to Colliers. In terms of activity, however, the area saw a drop of nearly 48 percent from the same period last year, with only 2.6 million square feet of deals.
“It is possible that we are experiencing a flywheel effect from a robust fourth quarter of 2014,” said Colliers Eastern Region President Joseph Harbert, “but there is potential for a strong year ahead.”
In Downtown, average asking rents hit a record $55 per square foot, largely due to large chunks of pricey space hitting the market, according to Colliers. Just under 807,000 square feet were leased in the first quarter, down nearly 66 percent year-over-year from 2.4 million square feet.
Midtown, in contrast, saw an uptick in leasing activity, with 4.9 million square feet of space leased, up 7.8 percent year-over-year from 4.6 million square feet. Average asking rents rose 3.6 percent year-over-year to $76.15 per square foot.