New York Market Overview
- Total Manhattan Class A Office vacancies stayed at 9.3 % vacant
- Total New York City Office vacancy stayed at 7.9 % vacant
While maintaining its position as the most expensive office market in the Americas, Midtown Manhattan ranks as the 10th most expensive such mmarket in the world. With occupancy costs of $127 per square foot, Midtown ranks just behind Moscow ($128.10 per square foot) in ninth and some distance behind London's West End ($267.14) in first. Midtown did move up from its previous ranking; it came 11th for the third quarter of 2014. Downtown Manhattan also jumped three spots to become the world's 25th most expensive office market, at $86.36 per square foot.
Availability in the Manhattan office market dropped to 9.6 percent due to a decrease in supply in the Midtown and Downtown submarkets. Midtown office availability dropped to 9.7 percent while Downtown availability shrunk to 12.2 percent, trends that were partially offset by an increase in available space, to 6.8 percent, in Midtown South.
Class A asking rents dropped slightly dipped across Midtown, Midtown South and Downton all three submarkets to an average of $77.09 per square foot in Manhattan, down nine cents per square foot. Class B asking rents reached an average of $60.21 per square foot, eclipsing $60 per square foot for the first time. The Manhattan office market remains strong as we approach the mid-year mark.
The increase in available supply in Midtown South only creates more opportunities for tenants in one of the most sought-after markets in the country. , predicting that available supply in Midtown and Midown and Downtown Office availability predicted to would decrease further over the balance rest of the year, . The market continues to chip away at 2.3 million square feet of negative absorption posted, having posted around 1 1 million square feet of positive absorption since the start of the year.
The Midtown market has recovered almost all of nearly 1 million square feet of space brought to the market at the start of the year. The Downtown market inked only one leasing transaction greater than 100,000 square feet through the first five months of the year, compared to six such deals through the same period last year. 75 percent of Downtown's leasing activity has come from leases under 20,000 square feet, compared to 70 percent last year.
Manhattan's most exclusive office buildings saw their highest asking rents jump 4 percent year-over-year. Rents in half of these buildings have been higher over the last six months. While the oOververall average asking rent for premium spaces hit $142.7 per foot, the average asking rent for less desirable spaces decreased 78 cents per foot to $88.9 per foot. The priciest building, 9 West 57th Street, has asking rents of $225 per foot. ,, while the second priciest, 667 Madison Avenue, has rents of $195 per foot. The Seagram Tower at 375 Park Avenue and Lever House at 390 Park both have rents of $170 per foot.