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Trophy Rents Shrink, But More Slowly

NEW YORK CITY-Top-tier office rents in Manhattan have declined 17.8% over the past six months, versus 18.7% between fall 2008 and this past spring, says JLL.

By Paul Bubny | Updated on December 23, 2009

NEW YORK CITY-Rents at Manhattan’s trophy office buildings continue to decline, but at a slower pace than six months ago, Jones Lang LaSalle says in its semiannual Skyline Review. JLL attributes the more gradual drop-off to a stabilizing economy, although the firm cautions that it’s too soon to call a market bottom.

“Although there appears to be some stability in the Midtown market, it is still too early to definitively say that vacancy has peaked,” James Delmonte, VP and director of research for JLL’s New York office, says in a release. “While it is important that activity has returned to the market, it is not likely that it will lead to substantial absorption of space over the next 12 months. Much of the current deal flow in the market consists of renewals and relocations, neither of which will reduce current supply levels.”

The fall 2009 Skyline Review says that Manhattan’s top-tier office buildings saw overall average asking rental rates drop 17.8% in the past six months, compared to a decrease of 18.7% between fall 2008 and this past spring. In terms of dollars, that translates into an average $68.73 per square foot, compared to $83.66 per square foot six months earlier.

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