Stat of the Week: 6.1 Percent

Last week, getting around Midtown was a chore, as Barack Obama was in town for the 71st United Nations General Assembly. As cars and pedestrians struggled to move up and down the avenues on the East Side and the blocked off streets, it made me think about the recent performance of the East Side–U.N. office submarket. This submarket is bordered by East 65th Street to the north, the East River to the east and to the west, Lexington Avenue south to East 47th Street and Second Avenue south to East 39th Street.

Despite the 100-basis-point vacancy increase from one year ago to 6.1 percent, the East Side–U.N.’s vacancy rate is the lowest of Midtown’s nine submarkets and fourth-lowest throughout Manhattan. Surprisingly, the vacancy rate drops along the avenues moving from west to east. The Lexington Avenue corridor has the highest vacancy rate in the East Side–U.N. submarket at 10.5 percent, due to five of the 16 buildings in the area with available spaces ranging from 60,000 to 150,000 square feet. Third Avenue is a much tighter corridor with a 4.8 percent vacancy rate, as only two of the 20 buildings have significant availabilities, but none greater than 90,000 square feet. Combining First and Second Avenues in this submarket only produces eight office properties totaling almost 1.8 million square feet. The lack of supply and demand from United Nations-related tenants keeps the vacancy rate low along these avenues at only 1.2 percent.