March
2003: Manhattan Office Space
Update
Prices
continued to soften as major
landlords offered further 10-15%
price reductions. Overall vacancy
rates remained relatively unchanged
in the past 30 days, with no
major changes in any particular
sub market (Downtown, Midtown
South, Midtown, or Uptown).
Major amounts of “Shadow
Space” loom (Shadow space
is space vacated by major corporations
who have as yet to list the
space for rent, since doing
so would require them under
the tax laws to recognize the
loss in the current year). Estimates
of Shadow Space are 5,000,000
square feet with more space
pending unless the economy picks
up soon. Some Shadow Space was
recently leased when Deutsche
Bank subleased 380,000-Rentable
Square Feet to Clifford, Chance.
Additional
vacancy is expected downtown
from the combination of Prudential
with Wachovia and due to Credit
Suisse First Boston’s
recent announcement of a 1,250-person
layoff. In addition, major firms
are dispersing their employees
from Manhattan. Bank of New
York is moving their back offices
to a 396,000 square feet tower
in Brooklyn and is expected
to move 1,400 employees in mid-2004.
Morgan Stanley bought the former
Texaco World Headquarters a
725,000 Square Foot Facility
in Westchester. MetLife will
move 1,700 employees to Long
Island City and New York Life
is considering moving 1,000
employees to Westchester. Goldman
Sachs is considering moving
support staff to Jersey City
having rented 600,000 RSF.
As
a result prices are falling
all over town. Class B space
Downtown can be rented on a
direct basis under $20/Rentable
Square Feet (RSF). In the Flatiron
district space can be rented
for $15 –18/RSF and direct
deals in midtown can be made
for $30-40/RSF
Landlords
are the most aggressive they
have been in 10 years. They
are offering to build to suit,
free architects to do space
planning and layouts, and temporary
space if needed in conjunction
with a long-term lease. Couple
these with incredibly favorable
rents and lease terms, and it
is obvious landlords are doing
whatever it takes to make deals
happen.
The
downtown market is active with
many firms looking to take advantage
of the downtown incentives/benefits.
The following link shows the
net effective cost of renting
space there. http://listings.downtownny.com/cust/dwalli/calculator/incentivescalc.asp
Harlem
is hot. Many not-for-profits
are seeking space in East, Central
and West Harlem and Washington
Heights. Given the limited supply,
expect rental prices to be as
high as other markets in Manhattan.
Please
feel free to contact us for
more detailed pricing information.
|
MARKET
TREND OBSERVATIONS |
OFFICE: |
| +
Total Market Vacancies fell
from 47.43 million RSF to
47.05 million RSF, while
Class A Vacancies fell from
26.14 million RSF to 25.69
million RSF. |
| +
Total Market Vacancies fell
as the decline in Total
Direct Lease space from
33.29 million RSF to 32.79
million RSF outweighed the
rise in Total Sublease vacancies
from 14.14 million RSF to
14.26 million RSF. |
| +
Total Direct Lease space
availability fell from 33.29
million RSF to 32.79 million
RSF, while Total Sublease
vacancies rose from 14.14
million RSF to 14.26 million
RSF. |
| +
The fall in Total Market
vacancies was a result of
a decline in vacant space
Downtown, where availability
fell from 12.82 million
RSF to 12.14 million RSF.
Midtown and Midtown South
both saw increased availabilities
as vacant space increased
from 24.4 million RSF to
24.59 million RSF and 10.21
million RSF to 10.33 million
RSF respectively. |
| +
Total Vacant Space in Midtown
continued to rise as Total
Direct Lease space increased
from 16.4 million RSF to
16.53 million RSF and Total
Sublease vacancies increased
to a new high of 8.06 million
RSF. |
| +
The increase in Total Vacant
Space in Midtown South was
due to a rise in Direct
Lease Space from 7.11 million
RSF to 7.32 million RSF.
During the same period Total
Sublease Vacant Space actually
fell to a new low of 3.01
million RSF. |
| +
While Total Direct Lease
vacancies declined from9.78
million RSF to 8.94 million
RSF, Total Sublease vacancies
rose from 3.04 million RSF
to 3.20 million RSF, leading
to an overall decline in
vacant space downtown from
12.82 million RSF to 12.14
million RSF. |
|
RETAIL: |
| +
Total Retail vacancies fell
from 0.48 million RSF to
0.44 million RSF. |
| +
Midtown Retail vacancies
declined from 0.16 million
RSF to 0.12 million RSF |
| +
Midtown South saw a slight
increase in availability
as Total Vacant Space rose
from 0.28 million RSF to
0.29 million RSF |
| +
Downtown Retail vacancy
rates remained unchanged |
INDUSTRIAL: |
| +
Total Industrial vacancy
rates remained unchanged
in all three market segments. |
|
| 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 |
Starrett
Lehigh Building 601 West
26th Street subleases |
25,000
|
$15 |
City
Spire 156 West 56 Beautiful
subleases renovated units
with furniture and phones
|
4,604-21,399
|
$25-33 |
OFFICE |
CLASS
A (In Millions of Rentable Square Feet)
|
|
Vacant Space |
|
Available now and in the next two years |
|
Direct |
Sublease |
Total |
% Vacant |
% Monthly Change |
|
Direct |
Sublease |
Total |
% Vacant |
% Monthly Change |
| Midtown |
10.00
|
6.45
|
16.45
|
5.50% |
9.00% |
0.09% |
|
21.97
|
8.66
|
30.64
|
0.32% |
| Midtown South
|
1.12
|
0.38
|
1.50 |
11.10% |
14.90% |
13.57% |
|
1.12 |
0.57 |
1.68 |
12.59% |
| Downtown
|
5.36 |
2.38 |
7.74 |
10.10% |
14.50% |
-8.59% |
|
8.53 |
3.83 |
12.36 |
2.56% |
| Total |
16.48 |
9.21 |
25.69 |
6.70% |
10.50% |
-1.74% |
|
31.62 |
13.06 |
44.68 |
1.40% |
|
| |
TOTAL
MARKET (In Millions of Rentable Square
Feet)
|
| |
Vacant Space |
|
Available now and in the next two years |
| |
Direct |
Sublease |
Total |
% Vacant |
% Monthly Change |
|
Direct |
Sublease |
Total |
% Vacant |
% Monthly Change |
| Midtown |
16.53 |
8.06 |
24.59 |
6.90% |
10.20% |
0.77% |
|
30.66 |
11.28 |
41.93 |
0.61% |
| Midtown South |
7.32 |
3.01 |
10.33 |
11.90% |
16.80% |
1.17% |
|
8.68 |
3.81 |
12.48 |
0.90% |
| Downtown |
8.94 |
3.20 |
12.14 |
11.80% |
16.00% |
-5.65% |
|
12.79 |
5.17 |
17.96 |
4.50% |
| Total |
32.79 |
14.26 |
47.05 |
9.10% |
13.10% |
-0.80% |
|
52.13 |
20.25 |
72.37 |
1.63% |
|
| |
RETAIL
(Total Market) |
| |
Vacant Space |
|
Available now and in the next two years |
| |
Direct |
Sublease |
Total |
% Vacant Direct |
% Vacant Total |
|
Direct |
Sublease |
Total |
| Midtown |
0.11 |
0.00 |
0.11 |
16.40% |
16.90% |
|
0.19 |
0.01 |
0.20 |
| Midtown South |
0.24 |
0.04 |
0.28 |
31.00% |
36.70% |
|
0.42 |
0.05 |
0.47 |
| Downtown |
0.04 |
0.00 |
0.04 |
30.40% |
30.40% |
|
0.04 |
0.00 |
0.04 |
| Total |
0.39 |
0.05 |
0.44 |
24.70% |
27.60% |
|
0.66 |
0.05 |
0.71 |
|
| |
INDUSTRIAL
(Total Market) |
| |
Vacant Space |
|
Available now and in the next two years |
| |
Direct |
Sublease |
Total |
% Vacant Direct |
% Vacant Total |
|
Direct |
Sublease |
Total |
| Midtown |
0.51 |
0.03 |
0.54 |
28.20% |
29.90% |
|
0.74 |
0.03 |
0.77 |
| Midtown South |
0.22 |
0.04 |
0.26 |
16.20% |
19.00% |
|
0.26 |
0.04 |
0.30 |
| Downtown |
0.00 |
0.00 |
0.00 |
N/A |
N/A |
|
0.00 |
0.00 |
0.00 |
| Total |
0.73 |
0.07 |
0.80 |
23.10% |
25.20% |
|
1.00 |
0.07 |
1.07 |
|
|
|
| Total
Market Vacancies fell from 47.43 million
RSF to 47.05 million RSF, while Class
A Vacancies fell from 26.14 million RSF
to 25.69 million RSF. |
|
|
|
| Total
Market Vacancies fell as the decline in
Total Direct Lease space from 33.29 million
RSF to 32.79 million RSF outweighed the
rise in Total Sublease vacancies from
14.14 million RSF to 14.26 million RSF.
|
|
|
|
| Total
Direct Lease space availability fell from
33.29 million RSF to 32.79 million RSF,
while Total Sublease vacancies rose from
14.14 million RSF to 14.26 million RSF.
|
|
|
|
The
fall in Total Market vacancies was a result
of a decline in vacant space Downtown,
where availability fell from 12.82 million
RSF to 12.14 million RSF. Midtown and
Midtown South both saw increased availabilities
as vacant space increased from 24.4 million
RSF to 24.59 million RSF and 10.21 million
RSF to 10.33 million RSF respectively.
|
|
|
|
| Total
Vacant Space in Midtown continued to rise
as Total Direct Lease space increased
from 16.4 million RSF to 16.53 million
RSF and Total Sublease vacancies increased
to a new high of 8.06 million RSF. |
|
|
|
The
increase in Total Vacant Space in Midtown
South was due to a rise in Direct Lease
Space from 7.11 million RSF to 7.32 million
RSF. During the same period Total Sublease
Vacant Space actually fell to a new low
of 3.01 million RSF.
|
|
|
|
While
Total Direct Lease vacancies declined
from9.78 million RSF to 8.94 million RSF,
Total Sublease vacancies rose from 3.04
million RSF to 3.20 million RSF, leading
to an overall decline in vacant space
downtown from 12.82 million RSF to 12.14
million RSF.
|
|
|
|
| Total
Retail vacancies fell from 0.48 million
RSF to 0.44 million RSF, as vacant Retail
space in Midtown declined from 0.16 million
RSF to 0.12 million RSF while vacancies
in Midtown South increased slightly from
0.28 million RSF to 0.29 million RSF and
Downtown vacancies remained unchanged.
|
|
|
|
| Total
Industrial vacancy rates remained unchanged
in all three market segments. |
| |
|
