New York Market Overview
- Total Manhattan Class A Office vacancies stayed at 8.8 % vacant
- Total New York City Office vacancy decreased from 8.0 % vacant to 7.9 % vacant
Manhattan Office and Retail rents are at the bottom.
Landlords are still offering generous concession packages to close leases, especially for larger users. This will not last. Concessions still key to grabbing tenants. More and more real estate professionals are talking about the market bottoming out, with two more major brokerage firm feeling that we have also reached the bottom.
Manhattan overall, the net absorption, was a negative 140,000 square feet and average asking rents fell. Midtown showed positive net absorption of nearly 360,000 square feet in March, and in the first quarter, more than a fifth of the 6.1 million square feet added to the market in 2009 had been absorbed. In Midtown South, there was 150,000 square feet of negative absorption and in Downtown more than 350,000 square feet of negative net absorption. Average asking rents in Midtown fell by 37 cents in March to $42.93 per square foot, after two months of increases, and the availability rate for Manhattan was up .2 point to 13.7 percent.
Asking rents are on the rise at some of the city's office buildings. SL Green Realty recently increased rents by 5 to 7 percent on its most high-end offerings. At the Seagram Building and the Lever House on Park Avenue, asking rents are up about 5 percent. 712 Fifth Avenue, 540 Madison Avenue and the upper floors of 1 Grand Central Plaza have also increased asking rents. However, Office vacancies are still on the rise in Manhattan, and rents in the overall office market are declining, down to $55.38 per square foot, the lowest level in three years in the first quarter.