Office Availability Drops in Manhattan in January: Report
Gus Delaport Feb. 19, 2013, 7:45 a.m.
The overall availability rate of office space in Manhattan dropped 20 basis points in January to 11.4 percent, according to Cassidy Turley’s most recent Manhattan Office Market Report, released Thursday.
The overall office market experienced 464,433 square feet of positive net absorption in January, the report noted, as average asking rent in Manhattan clocked in at $61.16 per square foot.
The drop in availability was driven largely by Midtown, which had six of its nine submarkets register positive absorption of 40,000 square feet or more. The downtown market was a contributor as well, with positive absorption of 260,351 square feet.
“The new year began with a flurry of activity,” said Peter Hennessy, president at Cassidy Turley, in a prepared statement. “A very welcomed decrease in availability was fueled by a long-awaited increase in Midtown activity. Midtown South approaches all-time high asking rents, and yet we still see room for growth in the coming months.”
Midtown’s availability dropped to 11.6 percent from 11.8 percent in December 2012. The neighborhood experienced positive net absorption of 493,749 square feet, largely supported by Jefferies’ renewal and expansion at 520 Madison Avenue, which was reported by The Commercial Observer last month.
Class A average asking rents in Midtown rose 1.9 percent to $78.60 while Class B average asking rents rose a whopping 19 percent from January 2012 to $49.99.
The downtown office market dropped 30 basis points to 13 percent, with two of the neighborhood’s three submarkets registering positive net absorption. The total net absorption for the market in January 2013 was 260,351 square feet, according to the report.
HarperCollins’ lease of 179,436 square feet at 195 Broadway, also reported by The Commercial Observer, was a significant contributor to the downtown market’s positive month. Class A asking rents were largely flat, according to the Cassidy Turley report, with a per-square-foot increase of $0.18 to $52.40.
Midtown South experienced a slight 30-basis-point increase in availabilities in January 2013, according to the report. Availabilities now stand at 9.3 percent with all five submarkets experiencing negative absorptions totaling 289,667 square feet.
Calls to Cassidy Turley were not immediately returned.