(Read more on the debt and equity markets.)
NEW YORK CITY-Even with the possibility of a downturn on the horizon, the New York City market forged ahead in August with a lower vacancy rate and a higher average asking rent, according to a recent Colliers ABR Inc. report. The report predicts that there will almost certainly be some layoffs in the financial services industry over the next few quarters and this may push into other business sectors as well.
With Lehman Brothers not taking an option on additional space at 399 Park Ave., Macquarie Bank postponing its impending space search and job losses beginning to mount in the suburbs, the tip of the iceberg has begun to appear, the report notes. Robert Sammons, director of research at Colliers ABR, tells GlobeSt.com that the hard evidence includes the two examples above; however, he notes that "more importantly, in my mind, was the anecdotal evidence gathered in speaking with several analysts at financial firms and REITs as well as economists within the New York City government."
However, New York City is going into any possible slump in as good a position as possible with an extremely low vacancy rate, a drought of new development and strong job growth over the past 12 months. For Manhattan in August, the class A vacancy rate dropped to 5.1% from 5.6% in July.
There was not one specific leasing transaction that drove the figure lower but a wide variety of smaller deals across all major submarkets. The average asking rent continued its rise, finishing the month at $83.1 per sf, up 1.4% from $82 per sf in July.
After being somewhat flat for several months, the Midtown class A market showed marked improvement with its vacancy rate falling 40 basis points to 5.2%. This is its best showing since the March-April period earlier this year when it dropped 60 basis points and its lowest vacancy rate since the 5.1% of March 2001. The class A average asking rent climbed to $94.5 per sf, up 1.6% from $93 per sf in July.
The Midtown South overall vacancy rate held steady at 7.2% in August with improvements in Chelsea and Hudson Square offset by increases in availability in the Flatiron and SoHo submarkets. The overall average asking rent eeked out a small increase, closing the month at $45.7 per sf, up from $45.5 per sf.
The class A vacancy rate for Downtown fell below the 5% figure for the first time since April 2001, closing August at 4.9%, down from 5.3% in July. The class A average asking rent got a boost during the month, climbing 2.3% to $57.1 per sf from $55.8 per sf in July.
Continue Reading for Free
Register and gain access to:
- 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
© 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.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
