"In general, there seems to be stability and a lot of activity this year," says Donald Lutt, GVA Williams managing director. There has been a wave of downtown leasing with landlords being aggressive."
According to the report, total availability in Manhattan declined two-tenths of a percent, with more than 650,000 sf absorbed, lowering the availability rate to 14.3% at the end of the first quarter of 2003. Overall, asking rents declined $1.40 per sf to $43 at the end of March 2003.
"When compared with inflation, commercial rents in Manhattan have increased consistently over the past decade," says Michael T. Cohen, president and CEO of GVA Williams. "A swift turnaround within the next year or two is inevitable."
On average, over the past decade, Manhattan office rental rates have increased more than 5% per year, while the citywide inflation rate has averaged less than 2.5% annually over the same period. The last slump bottomed out in the fourth quarter of 1993, with 18% vacancy rates and average asking rents of $26.89 per sf. At the end of the first quarter of 2003, vacancy rates stood at around 14% with average asking rents at $42.90 per sf.
"It's too soon to characterize this blip of positive absorption as a light at the end of the tunnel," Cohen adds. "We are approaching the bottom of this market, which we anticipate will come in the next 12 to 18 months. Smart investors and space users will begin to explore the market now to identify quality bargains, before the inevitable land grab."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
