Through May 2000, most of the square footage coming to market was sublet space. But for the first time this year, direct space has become a major factor, amounting to almost half the sublet space.

Like the month before, in June Midtown South posted the highest vacancy rate, 8.7%, up 0.4%, while in Midtown and Downtown the rate rose to 6.5% and 6.2% respectively. The highest negative absorption, 2.1 million sf, was recorded in Downtown, most of it in the Wall Street area. Midtown South was also a victim of growing negative absorption, the bulk of it from 360 Park Ave.

Not surprisingly, overall asking rates continued to slide in June, declining 2% to $53.43 per sf for the month and 6% for 2001. In Midtown, rates have come down 4% since January and for the first time in more than a year are nearing sub-$60 per sf.