Manhattan office vacancy rate hits six-year low

Rents above $70 psf for first time since 2008: CushWake

New York /
Jul.July 21, 2015 04:10 PM

Manhattan office vacancy rates have dipped below 9 percent for the first time since 2009, according to commercial brokerage Cushman & Wakefield, which also found that a robust Midtown market has propelled overall asking rents to a seven-year high.

The declining vacancy rate, which hit a six-year low of 8.8 percent, saw asking rents in the borough climb to more than $70 per square foot for the first time since 2008, according to Cushman.

Class A asking rents averaged nearly $76 per square foot across the borough – a 7.2 percent increase year-over-year – and the brokerage saw rent increases in 18 of the 20 Manhattan submarkets it tracks, according to Ron Lo Russo, Cushman’s New York Tri-State Region president.

The Midtown market’s 10.5 million square feet of new leases through the first half of 2015 represented a 12.5 percent year-over-year increase. Vacancy rates in Midtown fell to 8.9 percent.

Downtown vacancy rates at the end of the second quarter stood at 10.3 percent, while Midtown South “continues to be the tightest Central Business District in the nation” with vacancy at 6.2 percent, according to Cushman.

While the Downtown and Midtown South markets continue to see asking rents reach “all-time highs,” Midtown rents are still operating roughly 10 percent below their previous peak during the last cycle, Cushman executive vice chair Josh Kuriloff said.

But continuing tightness in the Manhattan office market could prompt asking rents to climb even higher, Kuriloff said, citing the previous such rent spike in 2005, when vacancy rates in the borough dropped to 7.5 percent.

Investment sales in the city are on pace to exceed $75 billion by year-end and are outperforming initial forecasts of between $60 billion and $65 billion, according to Robert Knakal, the brokerage’s chair of New York investment sales.

The Brooklyn market is on pace to reach a record $9 billion in investment sales, Knakal said, with the number of sales this year already having approached last year’s total.


Related Articles

arrow_forward_ios
Demir Sabanci and 41-47 West 57th Street (Sedesco, Google Maps)
Sedesco seeks rezoning for new Billionaires’ Row skyscraper
Sedesco seeks rezoning for new Billionaires’ Row skyscraper
Brookfield Property Partners CEO Brian Kingston and 300 Vesey Street, at far left (Brookfield)
Brookfield scores $224M refi on Battery Park office tower
Brookfield scores $224M refi on Battery Park office tower
Chetrit Group principal Michael Chetrit and 850 Third Avenue (850thirdavenue)
CMBS loan for Chetrit’s 850 Third Avenue enters special servicing
CMBS loan for Chetrit’s 850 Third Avenue enters special servicing
From left: Bain Capital Credit's David DesPrez, SKW's Ayush Kapahi and Danny Wrublin with 111 Wall Street (Google Maps, Getty, Chance Yeh)
SKW Funding, Bain Capital in $1.3B JV for troubled debt
SKW Funding, Bain Capital in $1.3B JV for troubled debt
Nightingale’s Eli Schwartz and 111 Wall Street (Google Maps, Nightgale)
Nightingale, Wafra secure $500M loan package to revamp 111 Wall
Nightingale, Wafra secure $500M loan package to revamp 111 Wall
Coinbase CEO Brian Armstrong and 55 Hudson Yards (Getty, Godsfriendchuck/Wikimedia)
Coinbase opening first NYC office at 55 Hudson Yards
Coinbase opening first NYC office at 55 Hudson Yards
Hamed bin Zayed Al Nahyan (Getty)
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
Manhattan sublease surge shows signs of slowing
Manhattan sublease scourge finally abates
Manhattan sublease scourge finally abates
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...