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November, 2002: Manhattan Office Space Update


Midtown sublease prices in Class “A” (Fancy new building) buildings are amazingly low. Prices at the top Class A buildings are now one half to one third of what they were a year ago. For example, at 590 Madison Avenue direct space was over $100/RSF a year ago, now nice subleases can be had starting at $45/Rentable Square Feet. Space at many other Class A midtown buildings are available from $25-45/Rentable Square Feet.

Leasing activity continues to be brisk as firms are looking to lock into lower cost space, both in Midtown and Downtown. 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.

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.

 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 9.40 6.08 15.47 5.30% 8.80% 2.04%
Midtown Manhattan South Office A 0.95 0.49 1.44 9.40% 14.30% 33.47%
Downtown Manhattan Office A 5.86 2.81 8.67 11.20% 16.50% 0.01%
Total Office A 16.21 9.38 25.58 6.80% 10.70% 3.12%
             
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 20.63 8.61 29.23 -0.24%
Midtown Manhattan South Office A 0.98 0.57 1.54 -1.17%
Downtown Manhattan Office A 8.29 4.30 12.59 1.27%
Total Office A 29.89 13.47 43.36 0.17%    
             


 MANHATTAN TOTAL OFFICE MARKET VACANT SPACE (In Millions of Rentable Square Feet))
   Direct  Sublease  Total % Vacant
Direct		 % Vacant
Total		  %Monthly
Change
Midtown Manhattan Office 17.49 7.61 25.09 7.30% 10.40% -2.19%
Midtown Manhattan South Office 8.67 3.37 12.04 12.90% 18.00% 9.89%
Downtown Manhattan Office 9.83 3.74 13.57 13.00% 18.00% 1.55%
Total Office 35.99 14.72 50.70 9.40% 13.20% -0.51%
             
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 30.30 11.24 41.54 -1.00%
Midtown Manhattan South Office 10.88 3.78 14.66 3.76%
Downtown Manhattan Office 12.84 5.46 18.31 0.21%
Total Office 54.02 20.48 74.51 -2.94%
             
* % Monthly Change from September 2002            

New York City Market Trend Observations:

  • While total market vacancies rose from 50.46 million RSF to 50.7 million RSF, Class A vacancies saw a return towards their 6 month average after a brief rise from 24.78 million RSF in September to 34.09 million RSF in October.
  • After a dramatic rise in the Total Direct Lease Vacant Space between May and August the Market has been relatively stable.
  • Both Total Direct Lease Vacant Space and Total Sublease Vacant Space increased over the past month.
  • The increase in the Total Market Vacancy rate was largely due to a rise in vacant space in Midtown South from 11.51 million RSF to 12.04 million RSF.
  • The continuing decline in Total Vacant Space in Midtown was due to a fall in the availability of Direct Lease Space from 17.91 million RSF to 17.49 million RSF.
  • The continuing rise in Total Vacant Space in Midtown South was due to a rise in the availability of Direct Lease Space from 8.14 million RSF to 8.67 million RSF.
  • While the Total Sublease Vacant Space Downtown has been fairly constant over the past six months, the available total direct lease space has steadily increased from 6.9 million RSF in June to 9.83 million RSF in November.
 
While total market vacancies rose from 50.46 million RSF to 50.7 million RSF, Class A vacancies saw a return towards their 6 month average after a brief rise from 24.78 million RSF in September to 34.09 million RSF in October.
After a dramatic rise in the Total Direct Lease Vacant Space between May and August the Market has been relatively stable.
Both Total Direct Lease Vacant Space and Total Sublease Vacant Space increased over the past month.
The increase in the Total Market Vacancy rate was largely due to a rise in vacant space in Midtown South from 11.51 million RSF to 12.04 million RSF.
The continuing decline in Total Vacant Space in Midtown was due to a fall in the availability of Direct Lease Space from 17.91 million RSF to 17.49 million RSF.
The continuing rise in Total Vacant Space in Midtown South was due to a rise in the availability of Direct Lease Space from 8.14 million RSF to 18.67 million RSF.
While the Total Sublease Vacant Space Downtown has been fairly constant over the past six months, the available total direct lease space has steadily increased from 6.9 million RSF in June to 9.83 million RSF in November.