Sales down, vacancy rates up, report says

The Manhattan market saw a 65.3 percent decline in closed sales across all types of property between September 2007 and this September 30, according to the third quarter 2008 Manhattan market overview from Cushman & Wakefield, released yesterday. Investment sales volume declined from $39.7 billion at the end of third quarter 2007 to $13.8 billion so far this year. The decline was steepest in the office market, with sales in the class A submarket decreasing 68 percent and other office submarkets declining 78.2 percent.

Office vacancy rates were up in the third quarter, the report said. Office vacancy rates for Manhattan rose from 5.7 percent last year to 7.4 percent at the end of the third quarter. Asking rents rose through the year until September, when they decreased.

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The report predicts the vacancy rate could rise to 11.5 percent in 2009 if job losses in the city, which traditionally add 40 to 60 percent of departing employees’ office space to the market, reach expected levels. TRD