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Midtown South Office Market Hit Hardest

NEW YORK CITY-Manhattan's Midtown South commercial office market has taken the brunt of the "dot-bomb" fallout, according to GVA Williams First Quarter Report. Others say NYC is insulated from a recession.

By Betsy Kraat | Updated on April 23, 2001

NEW YORK CITY-The “tremendous” gains recorded in the Midtown South market since September 1999 have been all but wiped out in the past two quarters, according to GVA Williams Vice Chairman Robert L. Freedman. Midtown South, according to the report, mirrored the Nasdaq’s surge and now is following it back down.

“It’s not that one large dot-com went out,” says Freedman. “It was the smaller 5,000-sf and 10,000-sf tenants that have left the market.” Freedman adds that nearly 1.3 million sf has come back on the market, boosting the Midtown South vacancy rate from 6.2% to 8.4%. Nearly the same amount of space is on the market now as was in March 1999; however, asking rents in Midtown South in 1999 were running an average of $30.44 per sf; now it’s an astonishing $45.38 per sf.

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