AVAILABILITY RATE RISES
Manhattan’s overall availability rate increased 60 basis points to 11.9% during the first quarter. The Class A availability rate rose by 90 basis points to 13.2%, increasing by 80 basis points Downtown to 17.9% and 70 basis points in Midtown to 11.8%. Tenants can select from nearly 28 million square feet (msf) of Class A space that is available within the next 12 months.
NEW CONSTRUCTION BOOSTS RENT
Manhattan's average Class A asking rent inched up by 0.4% to $83.04, as a 0.4% increase in Midtown to $88.34 offset a decrease of 1.5% to $69.63 in Lower Manhattan. The addition of new product has pushed average rent higher even as effective rent continues to decrease slightly.
LEASING DROPS
Leasing volume totaled 7.9 msf in the first quarter, a 17.6% decrease from the 9.6 msf leased in the fourth quarter of 2017.
INVESTMENT SALES RISE
Office property sales during the last six months (through February 2018) totaled $8.3 billion, a 18% increase compared to the total of $7 billion in the prior six months.
"Landlords are extending generous concessions to a broad cross section of tenants – not just to 100,000-sf-plus heavyweights – but even to companies a fraction of that size."
Stephen Berliner, Executive Vice President
"Tenants have capitalized on the extensive concessions being offered. For the time being, though, base rent remains 10% to 15% too high for most tenants. Until more landlords budge on taking rent, demand will be kept in check."
Jeffrey Peck, Vice Chairman