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Midtown Keeps Up Leasing Momentum

NEW YORK CITY-Manhattan's densest office submarket has now recorded four consecutive months of more than one million square feet in deals, CBRE says.

By Paul Bubny | Updated on October 07, 2009

NEW YORK CITY-Midtown office leasing exceeded one million square feet for the fourth consecutive month in September, continuing the release of pent-up demand by tenants who generally sat out the third quarter of 2008 and the first half of 2009, CB Richard Ellis reported Wednesday. The company’s third-quarter report, which also includes the monthly snapshot for September, notes that leasing volume for the past four months has exceeded the five-year rolling average.

The steady activity–which has included a number of early renewals–has helped bring stability to pricing as the slide in asking rents has tapered off, CBRE EVPs Paul Amrich and Robert Stillman said at a media briefing Wednesday morning. “The majority of people out there feel that rents are finding a bottom,” Amrich said.

Manhattan leasing volume overall will probably match 1991 levels by year’s end, said Stillman, while Amrich said Midtown’s ’09 performance will be comparable to 2002–both years being among the weakest in the past two decades. Whether that momentum carries over into 2010 is an open question; Stillman said we could see peaks and dips over the next several months. One factor that may slow down leasing velocity is landlords themselves, as they put the brakes on early renewals to avoid losing out on better rents as the market turns upward again.

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