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Strong Office Fundamentals Lead March Into 2007

NEW YORK CITY-With rents hovering around $50 per sf, companies may need to look Downtown when searching for new office space.

By Melissa Kress | Updated on January 19, 2007

NEW YORK CITY-The Midtown office market registered a strong December and Downtown saw major leases in excess of 100,000 sf during the month, leading Jones Lang LaSalle to predict an active 2007. And some of that activity may come from companies looking to renew before their leases expire over the next four years.

According to JLL’s New York Monthly Market Update for December, overall asking rents for office space in Midtown notched a 24% increase in the 12 months, with rents for class A space seeing “an unprecedented” jump of 34.6% year-over-year. “More significantly, the percentage increase is considerably higher than it was at the height of the market in 2000 when rents advanced by 21%,” the report states.

Not to be outdone, Downtown office buildings registered its own rent increase, year-over-year, with class A rents increasing 17% and overall rents increasing 19%, the report adds. However, even with the jump Downtown space is still a bargain compared to Midtown, says Ken Siegel, managing director at JLL. “When looking for high-end, class A space rents are generally exceeding $100 per sf in trophy buildings [in Midtown], but Downtown is half off,” he tells GlobeSt.com. “People are going to have to look Downtown.”

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