Average Manhattan asking rents have been increasing for the past 45 months. Despite this lengthy appreciation of rents, there are still submarkets in Midtown and lower Manhattan that have not reached pricing levels from the previous rising cycle in 2007. Midtown South is the exception to this stat; its asking rents are 41.9 percent higher today compared to midyear 2007. All five micro-markets in Midtown South are currently averaging their highest rents ever recorded, and Class C assets have inflated the most during this current cycle.
At $56.28 per square foot, Midtown South Class C average asking rents are 49.6 percent higher than previous market highs in 2007. Class A and Class B buildings are not far behind with 46.6 percent and 35.5 percent higher rents, respectively. Demand from TAMI (tech, advertising, media and information services) has kept the Midtown South availability rate below market equilibrium this year and has allowed asking rents to reach historic highs.
Looking at Midtown South’s niche markets, Hudson Square/Tribeca had the highest increase in Class C asking rents. At $62.39 per square foot, it is currently the highest Class C asking rent in all of Manhattan and is 62.3 percent higher than in 2007. Madison Square/Park Avenue South has the second-largest increase in Class C pricing, which, at $58.24 per square foot, is 51.4 percent higher than in 2007. The Chelsea/Meatpacking submarket is home to the most Class C buildings in Manhattan and witnessed a 42 percent asking rent increase, to $52.40 per square foot. The Flatiron/Union Square submarket Class C asking rent stands at $53.16 per square foot, 38.9 percent higher than in 2007. Rounding out Midtown South submarkets is Soho/Noho/Village, where Class C asking rents are 26.6 percent higher than in 2007, at $50 per square foot.