The average asking rent for office space in Manhattan broke $72 per square foot in “for the first time on record” in January, according to commercial brokerage CBRE. Total leasing activity during the month, however, was well below the recent average.
Manhattan leasing activity totaled 1.31 million square feet in January, marking a 41 percent drop from the five-year average of 2.2 million square feet for the month.
Midtown leasing activity of 700,000 square feet was 46 percent below the five-year average for January, while 230,000 square feet of leases signed in the Midtown South office market represented a 47 percent drop below that average. The Downtown market saw 376,000 square feet of leases signed, 18 percent below the five-year average.
But average asking rent for Manhattan office space rose 29 cents in January from the previous month to hit $72.14 per square foot, surpassing the $72 per-square-foot mark for the first time ever, the brokerage said.
Midtown asking rents of $80.01 per square foot represented a 6 percent increase year-over-year, while average asking rents of $70.40 per square foot in Midtown South were up by 7 percent from January 2015. Downtown asking rents were $56.80 per square foot in January, up by 4 percent from the same month last year.
Manhattan’s 10.8 percent office availability rate in January was up by 0.4 percent from the previous month, CBRE noted, but down 0.3 percent from the year-earlier period.
Midtown availability of 11.3 percent jumped 0.5 percent from December and 0.3 percent from January 2015. Midtown South – one of the tightest office markets in the country – saw an availability rate of 8 percent. This is a 0.6 percent increase from the previous month and a 0.7 percent decline from January of last year. Downtown availability of 12.1 percent was up 0.2 percent from December but down 1.1 percent from January 2015.
The three biggest leasing transactions of January 2016 were all renewals in Midtown – law firm DLA Piper’s 199,000-square-foot re-up at Mitsui Fudosan’s 1251 Sixth Avenue, financial research and media company Bloomberg’s 192,000-square-foot renewal at Vornado Realty Trust’s 731 Lexington Avenue and marketing firm Omnicom Group’s 167,000-square-foot deal at SL Green’s 220 East 42nd Street.