When it comes to large transactions, 18 deals in excess of 100,000 sf were completed. That's six more than were reported a year ago and three times the number at the 2002 mid-year point.
While law firms continue to be the dominant player in the current leasing market, taking 1.6 million sf to date this year, Krasnow said that there are a number of deals in the marketplace revolving around financial services firms. "I expect financial services to regain its rank as No. 1 in 2004. The latter half of 2004 could be even better."
New leasing activity measured 14.3 million sf, compared to 11.4 million sf in the same time period last year 2003. The overall office vacancy rate fell to 11.8% at the end of the second quarter from 12.5% at year end.
He added that sublease transactions remained attractive to the largest tenants. In fact, three of the top five deals so far were subleases and totaled approximately 1.5 million sf. Renewals and renewal/expansion deals continue to be an increasing trend. Notable deals of this type include recent transactions from Mellon (375,000 sf), Pfizer (266,000 sf) and the New York City Economic Development Corp. (262,000 sf)
Residential conversions, which Krasnow called "sweeping," will have an impact for years to come as employers, not normally associated with Lower Manhattan such as the publishing sector, will look to a base of talent who can finally afford to live within the city limits. Improvements to the transportation infrastructure and the modernization of offices will also be keys to the continued revitalization of Downtown.
The average asking rental rate in Manhattan overall increased to $40.56 from $40.53 at year end. While Downtown's rental rate continued to fall, to $32.25 from $36.92 at yearend, while Midtown and Midtown South each saw rental rate increases to $47.16 from $45.37 for Midtown, and $30.56 from $30.37 for Midtown South.
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.
