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
135 West 50th Street in Manhattan in NYC with George Comfort & Sons CEO Peter Duncan (Google Maps, George Comfort & Sons Inc.)
George Comfort & Sons inks 62K sf tenant in Midtown
George Comfort & Sons inks 62K sf tenant in Midtown
ABS Partners Real Estate founder Earle Altman and 270 Madison Avenue (ABS Partners, LoopNet, iStock)
NY Public Library leases 41k sf for Midtown offices
NY Public Library leases 41k sf for Midtown offices
Donald Trump, Brett White, and Letitia James with 40 Wall Street (Getty, Cushman & Wakefield, 40 Wall Street, iStock)
Cushman pushes back on subpoena in Trump property probe
Cushman pushes back on subpoena in Trump property probe
Brookfield Properties' Callie Haines (iStock, Brookfield Properties)
Hedge funds, investment firms rare bright spot for office leasing
Hedge funds, investment firms rare bright spot for office leasing
Ron Perelman with 35 East 62nd Street and 41 East 62nd Street (Getty, Google Maps)
Ron Perelman’s former Lenox Hill offices hit market for $160M
Ron Perelman’s former Lenox Hill offices hit market for $160M
Times Square Sheraton Hotel and MCR CEO Tyler Morse (Google Maps, Getty)
Times Square Sheraton loss $33M worse than reported
Times Square Sheraton loss $33M worse than reported
v
Rising interest rates weighing on Vornado’s earnings, Steve Roth says
Rising interest rates weighing on Vornado’s earnings, Steve Roth says
Tiffany and Co's Anthony Ledru with 200 Fifth Avenue (Tiffany & Co, Loopnet, iStock)
Tiffany & Co. trims HQ office lease
Tiffany & Co. trims HQ office lease
arrow_forward_ios

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

Loading...