Class B buildings also saw increased interest as the Manhattan vacancy rate dropped to 10.8%, the lowest since early 2001. Midtown led the drop in vacancy, seeing rates fall from 10.6% in June to 9.8% in July. The average Manhattan class B rent closed July up 6.3%, reaching $37.99 per sf from $35.75 per sf at the start of the year.
By City submarket, Midtown class A vacancy dropped to 6.0% in July from 6.2% in June, while average asking rents increased 3.6% to $69.24 per sf from $66.85 per sf over the same period. It should be noted the Times Square market was the only submarket of the six to show an increase in vacancy as 220,000 sf of space was added to the market at 1540 Broadway.
Overall vacancy in Midtown South dropped to 8.3% from 8.5% in June despite the addition of 110,000 sf of contiguous space at 99 Hudson St. Both Chelsea and the Flatiron submarkets showed strong improvement, followed closely by SoHo/Village. The overall average asking rent climbed slightly to $35.70 per sf from $35.51.
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