AVAILABILITY RATE HOLDS STEADY
Manhattan’s overall availability rate was unchanged, remaining at 11.7%. The Class A availability rate fell by 50 basis points to 12.7% but this was balanced out by a 50 basis point increase in the Class B and C availability rate to 10.8%.
RENT FLAT
Manhattan’s average asking rent ticked down from $73.88 to $73.85 during the second quarter. Rent has declined by 1.4% compared to mid-year 2017. Midtown's Class A average rent increased by 1.2% to $89.38, but Midtown South (down by 2.1% to $108.70) and Downtown (down by 2.1% to $68.26), both posted quarterly decreases in Class A rent.
LEASING SPIKES
Leasing volume totaled 10 million square feet (msf) in the second quarter, as five leases over 300,000 sf were completed.
INVESTMENT SALES RISE
Based on office property sales during the first half of the year, 2018 is on track to exceed transaction activity during 2017. Investment sales soared to just over $9 billion, compared to the previous six month total of $6.7 billion.
"Even as WeWork and other shared office providers absorb commodity space, many landlords are still saddled with space on lower floors. The only way to lease these less appealing floors in a competitive market is to be aggressive with pricing."
William Montana, Senior Managing Director
"Coworking space has surprised nearly everyone. The proliferation of shared office space has been impressive. Its current pace of expansion is unsustainable, though. At some point, even without the test of a recession, this sector will reach a saturation point, spurring some retrenchment."
Joe Genovesi, Executive Managing Director