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December, 2002: Manhattan Office Space


Continued Wall Street layoffs and the new Federal White Paper requiring financial firms to be diversified geographically are adding additional pressure on an already saturated leasing market. In light of the falling rents, leasing activity continues to be brisk as firms are looking to lock into lower cost space, both in Midtown and Downtown. Mayor Michael Bloomberg signed an 18.5 percent property tax hike, the largest in city history, into law Monday to help close steep budget deficits. Companies should make sure the get a Calendar 2003 Tax Base or face substantially tax escalations.

Landlords and sub-landlords (companies trying to rent out excess space) continue to add more soft dollars for work and free rent in addition to the already attractive prices.

Quality Midtown subleases in Class A buildings are available for $25-$45/Rentable Square Feet complete with furniture and phones. Direct leases Downtown are available at $24-$28/Rentable Square Feet including new installations and substantial free rent. Direct spaces in the Garment Center, Soho and Tribeca can be leased for $20 per Rentable square feet and less.

Downtown Incentives are still available and firms who were originally declined are encouraged to reapply.

Please feel free to contact us for more detailed pricing information.
SELECTED AMAZING DEALS:
Building Address
Size
Price
1330 Sixth Avenue. Hi end Installation. Motivated credit sublessor. 16,250
$25
1675 Broadway High floor with panoramic views, high end installation and credit sublessor.
16,759

$35
32 Old Slip. Amazing Hi quality installation. Good credit sublessor. 17,298
 $18
Empire State building subleases too many to units to list all. 2,000-40,000
 $20
444 Broadway. Hi end loft installation Recent hi end loft installation. 7500-30,000 $18
590 Madison Avenue. Dramatic Central Park Views recent installation, top credit subtenant. 13,599
 $45
City Spire 156 West 56 Beautiful subleases renovated units with furniture and phones 4,604-21,399
 $25-33
 
 
 
 MANHATTAN CLASS A OFFICE VACANT SPACE (In Millions of Rentable Square Feet))
   Direct  Sublease,  Total  % Vacant
Direct		  % Vacant
Total		  % Monthly
Change
Midtown Manhattan Office A 9.09 6.24 15.32 5.20% 8.70% -0.97%
Midtown Manhattan South Office A 0.95 0.54 1.49 9.50% 14.80% 3.42%
Downtown Manhattan Office A 6.18 2.93 9.11 11.80% 17.40% 4.81%
Total Office A 16.22 9.70 25.92 6.80% 10.90% 1.32%
             
MANHATTAN CLASS A OFFICE VACANT SPACE NOW AND IN THE NEXT TWO YEARS
(In Millions of Rentable Square Feet)
   Direct  Sublease  Total %Monthly
Change		    
Midtown Manhattan Office A 20.93 9.04 29.97 2.46%
Midtown Manhattan South Office A 0.98 0.61 1.58 2.65%
Downtown Manhattan Office A 8.30 4.21 12.51 -0.61%
Total Office A 30.21 13.86 44.06 1.59%    
             


 MANHATTAN TOTAL OFFICE MARKET VACANT SPACE (In Millions of Rentable Square Feet))
   Direct  Sublease  Total % Vacant
Direct		 % Vacant
Total		  %Monthly
Change
Midtown Manhattan Office 15.80 7.71 23.50 6.70% 10.00% -6.77%
Midtown Manhattan South Office 6.84 3.23 10.07 11.30% 16.60% -19.53%
Downtown Manhattan Office 9.73 3.77 13.50 13.00% 18.00% -0.53%
Total Office 32.37 14.71 47.07 8.70% 12.70% -7.71%
             
MANHATTAN TOTAL OFFICE MARKET VACANT SPACE NOW AND IN THE NEXT TWO YEARS
(In Millions of Rentable Square Feet))
   Direct  Sublease,  Total %Monthly
Change		    
Midtown Manhattan Office 28.84 11.63 40.47 -2.65%
Midtown Manhattan South Office 8.36 3.86 12.22 -19.94%
Downtown Manhattan Office 12.33 5.26 17.59 -4.08%
Total Office 49.54 20.75 70.28 -6.02%
             
* % Monthly Change from September 2002            

MARKET TREND OBSERVATIONS
  • While Total Market Vacancies fell from 50.7 million RSF to a six month low of 47.07 million RSF, Class A vacancies rose slightly from 25.58 million RSF to 25.98 million RSF.
  • The fall in Total Market Vacancies was driven by a fall in the amount of Total Direct Lease Vacant Space from 35.98 million RSF to 32.37 million RSF.
  • While Total Direct Lease Vacancies fell dramatically, Total Sublease Vacant Space fell only slightly from 14.72 million RSF to 14.70 million RSF.
  • The decrease in Total Market Vacancies was largely due to a fall in both total vacant space in Midtown from 25.09 million RSF to 23.50 Million RSF, and in Midtown South from 12.04 million RSF to10.07 million RSF. Total Downtown vacant space fell slightly from 13.57 million RSF to 13.50 million RSF.
  • In line with the previous two months the decline in Total Vacant Space in Midtown was due to a decrease in the availability of Direct Lease Space from 17.49 million RSF to 15.80 million RSF.
  • The past month saw a dramatic reversal as Total Market Vacancies in Midtown South fell from 12.04 million RSF to 10.07 million RSF, owing to a fall in both the available Direct Lease Space from 8.67 million RSF to 6.84 million RSF and Sublease Vacant Space from 3.37 million RSF to 3.23 million RSF.
  • The decline in Total Market Vacancies Downtown from 3.74 million RSF to 3.77 million RSF was due to a fall in the availability of Total Direct Lease Space Downtown from 9.83 million RSF to 9.73 million RSF.
Please feel free to contact us for more detailed pricing information.