In July, Midtown South overall average asking rents skyrocketed 3.8 percent to $67.53 per square foot. This one-month raise boosts the year-over-year increase to 6 percent, and with overall asking rents nearing $70 per square foot and 23.6 percent over historical highs, there are numerous factors contributing to these numbers. Midtown South Class A asking rents reached $77.73 per square foot in July, a 9.7 percent increase over the past 12 months. With the availability rate for Midtown South Class A space down to 2.7 percent, it is no surprise that Class A pricing reached the highest level ever recorded. Not to be outdone, Class B average asking rents jumped 9.9 percent in the last 12 months to $71.27 per square foot and exceeded the $70 per square foot average for the first time in history in July.
Despite Chelsea and Soho/Noho/Village overall average asking rents dipping year-over-year, the three remaining Midtown South submarkets had significant increases in asking rents, which contributed to the record-high asking rents for Midtown South. The Madison Square/Park Avenue South submarket had the largest increase, with overall average rents rising 13.3 percent up to $67.16 per square foot. This submarket’s Class A asking rents had the largest increase in the last 12 months, up 25.8 percent to $76.72 per square foot. Class B asking rental increases were significant as well, with an 11.8 percent uptick to $65.68 per square foot.
The highest year-over-year increases through July for Class B asking rents were in the Hudson Square/Tribeca submarket, where rents reached $72.64 per square foot, a 12.9 percent climb. Class B asking rents in the Soho/Noho/Village submarket soared 9.5 percent to $72.06 per square foot. At $85 per square foot, Class A asking rents went up 6.6 percent and Class B asking rents rose 5.8 percent to $76.48 per square foot in the Flatiron/Union Square submarket.