Downtown office market leasing activity strong, even as vacancy rate climbs
From left: 85 Broad Street, 70 Pine Street, One New York Plaza and Elizabeth Berger, president of the Alliance for Downtown New York (left two photos, source: PropertyShark)
Lower Manhattan office leasing activity through the first three quarters of the year has continued to outpace 2009, according to the Alliance for Downtown New York’s quarterly real estate market overview, even as third-quarter data shows moderate negative momentum compared to the same quarter a year earlier.
This year’s leasing activity is up 16 percent, compared to the first three quarters of 2009, according to the report, with 2.4 million square feet leased so far in 2010. In the third quarter alone, nearly 1 million square feet was leased. This marked the highest level of quarterly activity seen since 2008, according to the report, as average asking rents dropped to $39.08 a square foot, down from $42.01 during third-quarter 2009.
Despite this high level of leasing activity, the vacancy rate actually climbed to 12.1 percent, up from 9.9 percent during the same time period a year earlier. This increase may be due to an influx of office inventory during the past quarter, according to the report, including 85 Broad Street, 70 Pine Street and One New York Plaza — which, alone, added more than 600,000 square feet to the market.
Another report released earlier this month from Cushman & Wakefield indicated a similar phenomenon across the entire borough, noting that while leasing activity has been strong, vacancy has been on the rise. TRD