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Trophy Office Rents on the Rise

NEW YORK CITY—Prices have hit highs not seen since 2008, according to a new report.

By Rayna Katz | Updated on May 07, 2014

NEW YORK CITY—Trophy rents have returned to levels suited to Manhattan’s office towers of the same caliber as demand from smaller financial services tenants continues to drive both activity and pricing, according to a new report from JLL focused on activity this spring. While the flourishing media and tech industries have driven demand for some trophy office buildings—particularly in Midtown South and Downtown—weak employment growth in large financial and legal services firms continues to restrain overall absorption within the city’s high-end product.

JLL found that pricing at the top of the market has reached its strongest level since 2008. In 2013, 81 transactions with rents starting at $100 or greater were recorded, up from 51 in 2012. Year-to-date activity remained robust, with more than 20 properties now posting direct asking rents greater than $100 per square foot, compared to just 14 in the spring of 2013. Within this category, an even smaller set of buildings with Central Park views commands rents ranging from $150 to $200 per square foot.

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