Office vacancy declines as the local economy improves and NY unemployment declines to 6.1%:
New construction and proposed layoffs from Marsh & McLennan (3,000 employees) and Verizon relocation from Midtown will increase the supply of office space and cause vacancy rates to stabilize in the near future.

The Office Market continues to tighten with no new buildings until the 3rd quarter of 2005 in Midtown and 4th quarter Downtown.
The downtown market should soften with the addition of 7 World Trade Center.

Landlords are feeling upbeat based on the declining vacancy figures for class A office are down to 10.5% from 10.6% from first quarter numbers and 10.7% a year ago. Landlords are decreasing concessions (free rent and work) to lessees as demand rises and limited new product is coming to market.

Landlords are optimistic about rents rising and are slowly raising rents and decreasing concessions on Manhattan office rentals. Meanwhile the sales market for both New York residential and Manhattan commercial buildings remains hot.

The downtown markets slowly deteriorate as new buildings are built and additional spaces are vacated as companies relocate.
Citigroup is moving 1,000 jobs from Downtown Manhattan to New Jersey.

New York City's unemployment rate fell for a fourth consecutive month, dropping to 7%, as compared to a year earlier when the rate was 8.3%. However, the city s labor force participation rate fell to 57% in May, which is 8.9 percentage points below the national average.

Downtown vacancy increased while Midtown and Midtown South vacancy remained largely unchanged. The local economy continues to improve with 4,800 new jobs created last month predominately in the city's film and publishing industries.

Class A Manhattan office rental market vacancies increased by 4.89% this month after declining for the past 5 months and Total Market vacancy increased by 2%.

Vacancy rates continue to decline, combined with strong demand, limited new construction and millions of square feet of commercial space converted to residential uses; the market will likely continue to tighten.

Class A New York Office rental market continues to tighten and rents start to rise as the economy recovers. Retail vacancies increase across all segments and Industrial vacancies decline.

Vacancy rates decrease in Midtown and Downtown as major space commitments are made. The tightening in part is temporary in nature as the major space commitments are relocations not expansions and therefore when the previously occupied space comes onto the market the vacancy rates will return to previous levels.

Rents are off their recent lows as landlord’s expectations of future market conditions have begun to change in view of New York City’s slow but continued economic recovery. Jobs losses have stemmed and there has been some net job creation, especially in the not for profit and education labor markets. However, even though a number of corporations such as Bank of America and Pfizer are planning expansions, these job gains are mitigated by the planned relocation and geographical diversification of major financial firms such as Goldman Sachs, Morgan Stanley, Bank of New York, TIAA-CREF and many more.