NEW YORK-As investors breath a sigh of relief after not going over the fiscal cliff—at least for the time being—and with both the Presidential election and the euro zone crisis behind them, they're likely to create robust commercial real estate activity in 2013, according to Glenn Rufrano, president and CEO of Cushman & Wakefield, who spoke on Tuesday during the company's fourth quarter market report and outlook briefing.

“We expect to see a 15% to 18% increase in investment sales this year,” he said. “2012 was the year of uncertainty and we believe there will be less uncertainty in 2013.” That relative clarity is likely to move markets, added Ken McCarthy, chief economist at the company.

“Maybe less uncertainty will be enough,” he said. “Businesses and investors have the wherewithal to spend; though the fiscal cliff resolution is going to reduce spending in the next six months.”

And buyers have a lot of ground to make up, Rufrano noted. While the US as a whole saw a 15% sales volume increase year-over-year, New York saw only 3% growth. Part of the problem stemmed from some large deals falling apart, including Worldwide Plaza, 11 Madison Ave. and Tower 45. In addition, he said, there simply wasn't enough available product as cautious executives stayed put in their offices.

On the leasing side, results for the end of last year also bode well for 2013, C&W executives report. The fourth quarter of 2012 posted a total of 6.4 million square feet of office space leasing, the highest quarterly leasing level for the year. The strong leasing period follows a year in which Manhattan office leasing reached the highest total since 2000, C&W said, with 30.1 million square feet of new deals completed.

At year-end, the overall average asking rent in Manhattan increased 4% year-over-year to $59.54 per square foot from $57.23 per square foot. The Manhattan class-A direct asking rent surpassed the $70 per square foot mark—for the first time since July 2009--at $70.15 per square foot at the end of the quarter.

Midtown South continued to be a popular market. The market had the largest increase in average asking rent year-over-year. At the close of the quarter, the average asking rent in the Midtown South market totaled $49.69 per square foot, up 8.3% year-over-year.

A trend to watch, he noted, is companies seeking out new, still-to- be-built offices that provide features that can't be matched by existing space. “The story of 2013 is that companies will look for efficient, green space, and they will look toward new construction.”

There's 21 million square feet of new office construction in Manhattan, and only about 15% of that is spoken for, Sachs noted. For 2013, he said, “we anticipate several new commitments" to this new office space. The second half of the year in particular will see large tenants becoming more decisive, he asserted.

The Midtown market had the largest increase in the vacancy rate from last year, having gone up to 10.3 percent, up from 9.6 percent in 2011. The average asking rent closed at $67.36 per square foot, up 3% year-over-year.

“As the political and economic environment gains clarity, we will see the re-emergence of large corporate and financial service occupiers in the market in the second half of 2013,” said Sachs.

Meanwhile, the Downtown market is the only Manhattan submarket that had a year-over-year decrease in the vacancy rate, Sachs pointed out. At the end of the fourth quarter, the Downtown vacancy rate was 8.8%, which is down 9.5% from the same time in 2011. The average asking rent has also decreased, dropping 8% to $39.58 per square foot from $39.88 per square foot a year ago. The class-A asking rent totaled $45.16 per square foot, up 1.8% year-over-year.

“Evolving demographics, combined with the completion of high-quality office space have elevated Downtown to a 'destination' office market,” said Robert Constable, a C&W executive director. The area at one time didn't have enough residents or amenities for daily living, including schools, but that's changed, he noted, making the area desirable both to live and work.

The retail market across Manhattan, and in particular Fifth Avenue, continues to entice investors, said Joanne Podell, an executive vice president.

“The continuous transition along Fifth Avenue from 57^th Street to 34^th Street tells a tale of the Upper Fifth Avenue corridor extending south,” she asserted. Above 49^th Street on Fifth is a tight market, where availability continues to be low while asking rents stay at high levels, according to Podell. Below 49^th Street however, there have been several new additions of space to the market, with an obvious rise in asking rents.

From last year, the region between 42^nd and 49^th Streets has seen a 12.6% increase in rents, with the average asking rent closing the year above $1,000 per square foot, she said.

Put another way, there was a lot of sales activity at the end of the year, said Steve Kohn, president of equity, debt & structured finance. “Of the total volume in 2012, 42 percent occurred in the fourth quarter, and as a result the total sales volume this year surpassed the 2011 total.

“Thank goodness for the fourth quarter,” he said. “It's amazing what a fear of tax increases can do.”