market research

May 2009

May 2009 New York Commercial Real Estate Market Report

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Leasing activity grinds to a near halt. The Midtown Class A vacancy rate is 12.2 percent since April of this year, the highest rate since August 1996. There is 7.8 million square feet of sublease space available in Class A buildings, the most since they started keeping records in 1991.

New York Market Overview

  • Total Manhattan Class A Office vacancies increased from 7.4 % vacant to 7.6 % vacant
  • Total New York City Office vacancy increased from 7.0 % vacant to 7.2 % vacant
Of Midtown's 222 million square feet of office space, 30 million square feet is available. New commercial buildings, such as 11 Times Square and 510 Madison Avenue scheduled to open in a year, will add to the glut of vacant office space. Major financial firms continue to unload massive amounts of space onto the market. Citigroup is offering 300,000 square feet in Midtown for sublease from properties such as 485 Lexington Avenue.

There is a near standstill in leasing activity and building sales in New York. Income producing property sales are not taking heavy reductions while sales of vacant spaces are highly discounted. Company downsizings are leading to higher vacancies and lower lease prices. The rental rates and interest rates have driven down building values which further compound building-owner bankruptcies and troubles for banks - which will lead to more job losses.
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