Midtown South Boasts Shortest Lease-Up Time
How long does Manhattan office space stay on the market for lease? The simple answer to that is an average of 19 months, currently. But with a market as large and dynamic as Manhattan’s, let’s take a closer look at which submarkets and classes of space lease up the fastest.
Sticking with the entire Manhattan market, the average time that Class B space spends on the market is 15 months, while Class A space averages 23 months. This is driven by both Midtown and Midtown South Class B space averaging 14 months on the market. This trend also supports the demand from value-driven tenants over the past two years and the lower Class B availability rate of 10.8 percent, compared with the 12.5 percent Class A availability rate. With Class B space on the market an average of eight months less than Class A space, asking rents have increased more steeply in these properties—by 8.1 percent since the end of 2012—while Class A asking rents increased only 2 percent.
Of the three major markets, in all classes of space, it is no surprise that Midtown South has the shortest lease-up time of 12 months, followed by Midtown with 18 months and Downtown with 21 months. This fits well with the mid-year availability rates of the three markets, at 8.1 percent, 11.4 percent and 14.6 percent, respectively.
Of the 17 submarkets that Cassidy Turley tracks, the three with the shortest average time that space stays on the market are all in Midtown South. Space in the Flatiron/Union Square (seven months), Chelsea/Meatpacking (nine months) and Madison Square/Park Avenue South submarkets (12 months) leases up the quickest. Times Square was the lone anomaly, as the average time on the market for this submarket is 30 months, despite having the lowest Midtown availability rate of 6.6 percent. This statistic is skewed significantly by 11 Times Square having been on the market for almost six years.