"There has absolutely been more tenant activity recently, yet despite that, the Manhattan class A vacancy rate climbed to 12.2% from 12.1% in October, now its highest since the 12.8% in April 1997," says the Colliers report. Overall vacancy in Manhattan climbed 10 basis points to finish the month at 13.5%, its highest since the 13.6% in November 1996, Colliers says. Even so, CBRE reported that Midtown produced 1.19 million square feet in November, marking the fifth month in six that the submarket has registered more than one million square feet of leasing velocity.
Year to date, Midtown's leasing velocity is 10.03 million square feet, off 12% from the YTD tally of 11.44 million square feet the year prior, according to CBRE. Its MarketView report for Midtown notes, however, that about 70% of that leasing volume has occurred from June onward.
Vacancy in Midtown actually declined one basis point from October, declining to 10.2%, CBRE says. Jones Lang LaSalle puts the vacancy rate for Midtown at 14.3%, but also notes that it's been "surprisingly stable" since June. One factor keeping the vacancy rate on a fairly even keel has been "enough activity to counterbalance space coming onto the market," according to JLL. Colliers reports a class A vacancy rate of 13.7%, compared to JLL's figure of 14.6%.
Similarly, sublease availability in Midtown has held steady, below June's peak of 5.1%, CBRE says. The 4.7% availability rate for sublet space crept down two basis points to 4.7% from the previous month.
In Midtown South, the vacancy rate picture depended on which firm was doing the reporting. JLL says vacancy in Midtown South was flat at 11.1%, both overall and for class A and class B properties. However, CBRE says vacancy in the submarket declined six-tenths of a percent to 9.8%. Colliers reported at 14.4%, its highest since 1995.
Downtown, CBRE says the vacancy rate dropped two basis points to 7.3%, with an availability rate of 11.8%, unchanged from October. JLL says the vacancy rate fell from 11.1% in October to 11% in November, while Colliers put at it 8.5%, blaming a rise in direct availability for the month-over-month increase.
Colliers says just four buildings—600 Third Ave. in Midtown, 1 Madison Ave. and 350 Fifth Ave. in Midtown South, and 32 Old Slip in Lower Manhattan—accounted for most of the increase in vacancy across Manhattan. In the case of 32 Old Slip, the tenant giving up space was Goldman Sachs, which is now moving employees into its new headquarters.
For all three submarkets, asking rents continued a downward trend, if less steep than in prior months. Colliers says class A rents closed November at $62.42, down from $3.12 the month before. The overall asking rent was also off from the prior month, but fell only 28 cents to $50.63.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- 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
*May exclude premium content© 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.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
