The Real Deal Miami

Midtown Manhattan sees double-digit drop in office rents, London’s West End still world’s most expensive office market

December 01, 2009 11:31AM

As commercial real estate floundered across the globe, the cost of renting office space plummeted in some of the world’s most prominent financial centers. On average, office markets saw a 7.7 percent decline in rental expenses, according to a CB Richard Ellis report released today, but several dozen markets experienced drops in the double-digits. Midtown Manhattan slipped to 24th on that list, at $68.93 per square
foot, down from its 15th-place ranking last year, though it is still
the most expensive office market in the U.S. Nearly three-quarters of the 179 markets surveyed saw declines, and Singapore, Hong Kong’s Central Business District, and Downtown New York City were among those hit hardest. Those markets ranked second, fourth and ninth for largest rental cost decreases with roughly 53 percent, 41 percent, and 30 percent, respectively. Kiev, Ukraine came in first with a crushing 65 percent drop. Meanwhile, the West End district in London clung to its title as the world’s most expensive office market, with costs averaging $184.85 per square foot. “While there are signs that commercial real estate values are
stabilizing in some markets in Asia and parts of London, underlying property fundamentals are still weak,” Raymond Torto, global chief economist at CBRE, said in a statement.