Large leasing deals brought in the new year on a good note in January, sending the class A office vacancy rate down in all Manhattan markets, according to a recent report by Colliers ABR.
Fueled by three transactions exceeding 200,000 square feet, the Midtown Manhattan office did especially well, with a January that produced 2.13 million square feet of new leasing, according to a report by CB Richard Ellis.
Leasing activity in the rest of Manhattan was substantial, if not spectacular, the CBRE report said.
Overall, the class A vacancy rate in Manhattan dropped to 10.7 percent in January from 11.3 percent the month before, according to the Colliers report.
Another positive sign for the Manhattan office market was the increase in average asking rents. The class A rate jumped 2.8 percent to $46.85 per square foot from $45.59 per square foot the month before, the Colliers report said.
Midtown
The biggest of the big deals, which took place in the Grand Central submarket, was the PricewaterhouseCoopers lease of 800,000 square feet at the newly opened 300 Madison Avenue.
PwC will be consolidating from its two current locations, 1177 and 1301 Avenue of the Americas. In another large lease, Kramer Levin Naftalis & Frankel took PwC’s space at 1177 Avenue of the Americas in a deal for 283,000 square feet.
Also, at 750 Third Avenue, Fairchild Publications leased 234,000 square feet.
As a result of the large transactions, Midtown Manhattan saw its class A vacancy rate fall to 10 percent from 10.6 percent in December, the Colliers report said.
Midtown class A average asking rents got a bit of a bounce to start the year, climbing 2.9 percent from $52.37 per square foot in December to $53.89 per square foot in January, according to the Colliers report.
The CBRE report said that Midtown experienced 775,000 square feet of positive net absorption in January, and that the availability rate dropped a dramatic 0.4 percent for the month to 13 percent.
Downtown
Downtown showed improvement in its vital signs in January, with the class A vacancy rate dropping to 13.7 percent compared to 14.2 percent in December, the Colliers report said.
Class A average asking rents recovered slightly, climbing to $34.75 per square foot from $33.88 per square foot, the report said.
The CBRE report said that Downtown showed positive net absorption of 38,000 square feet in January, while the availability rate increased by 0.1 percent to 15.4 percent.
Midtown South
The Midtown South class A vacancy rate eased to 6.5 percent in January from 6.8 percent in December, according to the Colliers report.
Like Midtown and Downtown, class A average asking rents were on the increase, jumping to $29.70 per square foot after having fallen in December to $27.64 per square foot, its lowest level in recent years, the Colliers report said.
The CBRE report said that Midtown South showed positive net absorption of 93,000 square feet and that the availability rate declined 0.1 percent to 12.4 percent.