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Big Renewals Hint at Market Bottom

NEW YORK CITY-If June's surge holds up, it could signal that tenants feel that pricing is right to make a move, says CB Richard Ellis

By Paul Bubny | Updated on July 15, 2009

NEW YORK CITY-A series of large deals in recent weeks–albeit all renewals–could prove to be an early indication of the Manhattan market reaching bottom, CB Richard Ellis leasing experts said Wednesday. “Watch the leasing volume monthly,” advised EVP Paul Myers at a media briefing on CBRE’s Q2 Manhattan market analysis. An uptick in volume suggests that tenants who have put off leasing decisions now feel the timing–and pricing–are right to make a move, says CBRE.

Certainly, June results suggested such an uptick, with both CBRE and Cushman & Wakefield reporting a dramatic jump over the previous month. CBRE reported June leasing activity throughout Manhattan of 1.47 million square feet, compared to 980,000 square feet in May; C&W puts the tally at 1.7 million square feet, surpassing May and June totals combined.

However, both firms also cautioned that it remains to be seen whether this signals a trend, and Myers observed that year-to-date leasing suggests that 2009 will go down as the weakest 12-month period since CBRE has kept track. CBRE says 5.9 million square feet has been leased YTD; Cushman says it’s 6.3 million.

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