LITTLE CHANGE IN AVAILABILITY
Manhattan’s overall availability rate inched lower, falling from 11.7% to 11.6%, but has increased by 40 basis points from a year ago. The Class A availability rate fell by 40 basis points to 12.3%, with a 140 basis point decrease in Midtown South's Class A rate to 12.9% and 30 basis point declines in both Midtown and Downtown, to 10.9% and 17.2%, respectively.
OVERALL RENT FALLS SLIGHTLY
Manhattan’s average asking rent decreased by 0.3% from $74.41 to $74.21 during the third quarter. Rent increased by 0.6% compared to the third quarter of 2017. Midtown's Class A average rent inched up by 0.2% to $89.35.
LEASING DECLINES IN QUARTER
Leasing volume fell to 8.4 million square feet (msf) in the third quarter. Several substantial bank leases, and continued growth in the coworking sector, topped leasing activity. Year-to-date leasing (28.5 msf) is the highest it has been since 2014.
INVESTMENT SALES RISE
Office property sales during the first seven months of the year totaled $11.6 billion, a 46% increase compared to the first seven months of 2017.
"WeWork recently supplanted JPMorgan Chase as the top tenant in Manhattan. There can be no disputing coworking's success in disrupting office leasing. It will take a recession to see if this sector's footprint will become a fixture or falter instead."
Jeffrey Peck, Vice Chairman
"Leasing activity has been running above average since the start of 2017. A recent burst in economic growth, coupled with a willingness among firms to invest in the workplace has kept volume in Midtown elevated. Even so, leasing is barely keeping pace with the delivery of new supply and continued space densification."
Erik Schmall, Vice Chairman