Office Market Stays Strong Despite Concerns

NEW YORK CITY-Despite summer subprime loan concerns and stock market volatility, New York City’s commercial market remains, strong according to Grubb & Ellis Co.’s Third Quarter Office Market Trends Report. The report, which details the state of the Manhattan market indicates that the city’s real estate market steamed ahead in the third quarter.

The vacancy rate dropped 20 basis points to 4.9%–its lowest level in more than 25 years–and average asking rent on all classes of space increased $2.15 per sf from the second quarter to $69.55 per sf. Investors, however, were not as bullish on the real estate market as landlords were, as the blistering pace of investment of the first half of the year showed evidence of slowing, the report noted. In Q3, $5 billion in transactions were completed, which is a sharp decline from the $13.1 billion average in each of the two previous quarters. Still, with more than $31 billion in total investment transactions so far this year, the market is on track to double 2006′s total of $17 billion.