Firm Sees NYC Rental Market Disconnect

NEW YORK CITY-Jones Lang LaSalle’s spring 2008 Skyline Review revealed a significant disconnect in average asking rental rates between the overall office market here, and the city’s trophy-quality spaces. While office leasing activity has slowed throughout the city, the percentage of leasing transactions with starting rents of $100 or more has increased from 25% to 30% in the past six months, the report says.

The Skyline Review is an ongoing index of the performance of 58 of the City’s Midtown and Downtown trophy buildings. The company released the first Skyline Review in fall 2006 to track how a city’s office market is performing by comparing data on the buildings that lead the market. A JLL spokesperson tells GlobeSt.com that some of the Midtown trophy buildings include One Bryant Park, 499 Park Ave., 450 Lexington Ave., 885 Third Ave., 7 Times Square, and 1177 Avenue of the Americas. Downtown buildings include 140 Broadway, One Chase Manhattan Plaza, 7 World Trade Center and 1, 2 and 3 World Financial Center.

The submarket’s high-end properties had rates increase nearly 3%, reaching $122.93 per sf according to the Skyline Review from $119.41 per sf in the fall 2007 Review. In the past year, Midtown trophy buildings have seen rents increase 18% from the $104.14 per sf recorded this past spring. There were 47 buildings in Midtown with overall average asking rents starting at $100 or more, and 21 buildings with overall average asking rents starting at $125 or more, according to the JLL report.