The Real Deal New York

Downtown office market begins 2017 with strong Q1

Leasing activity was most in two years
April 03, 2017 12:00PM

From left: Larry Silverstein, 4 World Trade Center and Spotify’s Daniel Ek

Downtown Manhattan’s office market has its best quarter in two years.

Led by big leases like Spotify’s 378,000-square-foot deal at Silverstein Properties’ Four World Trade Center, the submarket recorded 2.3 million square feet in the first quarter, the Wall Street Journal reported.

That was the most in two years, and 44 percent above the quarterly average since 2007. Downtown logged five of the 10 largest Manhattan leases for the quarter, according to JLL.

In areas of Midtown South where activity is usually highest among tech and advertising firms, insurance, beauty and financial companies signed the biggest leases.

And while overall activity has been strong, asking rents remained mostly flat. Downtown rents dipped 2.2 percent to $56.45 per square foot, while Midtown rents crept up 1.1 percent to $75.78 per square foot.

Midtown South was the standout, with asking rents climbing 11.7 percent to $76.65 per square foot.

There are about 11.7 million square feet worth of new office space expected to hit the market in Manhattan through 2020. Half of that space is committed. [WSJ]Rich Bockmann