Optimal Spaces, Inc. Announces New York Needs to Move Office Space

Income producing property sales are not taking heavy reductions while sales of vacant spaces are highly discounted.

New York City, NY, May 1, 2009 – Leasing activity grinds to a near halt. The Midtown Class A vacancy rate is 12.2 percent since April of this year, the highest rate since August 1996. There is 7.8 million square feet of sublease space available in Class A buildings, the most since they started keeping records in 1991. Of Midtown's 222 million square feet of office space, 30 million square feet is available. New commercial buildings, such as 11 Times Square and 510 Madison Avenue scheduled to open in a year, will add to the glut of vacant office space. Major financial firms continue to unload massive amounts of space onto the market.

Income-producing property is still valuable to investors, but vacant space is heavily discounted. Company downsizings are leading to higher vacancies and lower lease prices. The rental rates and interest rates have driven down building values which further compound building-owner bankruptcies and troubles for banks – which will lead to more job losses. Major financial firms continue to unload massive amounts of space onto the market. Citigroup is offering 300,000 square feet in Midtown for sublease from properties such as 485 Lexington Avenue. Rental price negotiations continue as landlords feel pressure of buyer’s market.

For the latest market research on New York City commercial real estate, contact Stephen Sunderland. Optimal Spaces releases a monthly analysis of the market, including detailed statistics and graphs.