For the month of May 2017, 2.28 million square feet was leased in Manhattan, down from 3.13 million leased the month previous and the 2.89 million leased in May 2016.

NEW YORK CITY—The Manhattan commercial office market is a mixed bag with leasing activity down for the first five months of this year, while average asking rents are higher as is the borough-wide vacancy rate.

Colliers International reports that from January through May, 14.63 million square feet of office space was leased as compared to 15.45 million square feet during the same period in 2016. For the month of May 2017, 2.28 million square feet was leased in Manhattan, down from 3.13 million leased the month previous and the 2.89 million leased in May 2016.

The Manhattan office availability rate has remained steady at 10.3% for both April 2017 and May 2017, up slightly from the 10.0% rate registered in May 2016. On the positive side of the ledger, Colliers statistics show that the average asking rent continues to rise in Manhattan, increasing from $73.03-a-square-foot in May 2016 to $73.34-a-square-foot at the end of April of this year to $73.64 a square-foot at the end of May 2017.

The largest lease deal in the borough was BlackRock's nearly 500,000-foot lease at 50 Hudson Yards, which officially went into the statistics last month. The asset management firm signed a letter of intent in December on the lease deal at the 58-story office tower.

Craig Caggiano, executive director, New York tri-state, Colliers International, says the best word to describe current market conditions is “stable.” Caggiano and Franklin Wallach, managing director, research group, Colliers International – New York, agreed that Downtown and Midtown South markets have performed well thus far in 2017. The largest deals in those markets include Spotify's 378,000-square-foot lease at 4 World Trade Center in February. Other significant Downtown deals of late include the city's Human Resources Administration taking 193,821 square feet at 375 Pearl St. and Business Insider's 88,050-square-foot lease at 1 Liberty Plaza. Notable Midtown South transactions include Intermix's deal for a little under 81,000 square feet at 111 West 33^rd St. and Capital One's expansion lease of 52,000-square-foot lease at 11 West 19^th St.

Not reflected in Collier's overall availability numbers was JPMorgan Chase's expansion at Five Manhattan West to nearly 428,000 square feet that was announced earlier this month.

Keeping with his stable theme, Caggiano relates, Midtown South, Midtown and overall Manhattan availability rates have remained stable year-over-year. The Midtown availability rate at the end of May 2017 stood at 10.9%, up slightly from 10.7% a year earlier. The Midtown South rate stayed the same at 8.8% in both April and May of this year, but was higher than the 7.7% rate posted in May 2016. Downtown's availability rate stood at 11.4% at the end of May of this year, down from 11.7% a month earlier and 12.4% in May 2016.

Leasing in Midtown South totaled 1.35 million square feet and was up by more than 25% in May as compared to a month earlier and nearly 72% higher year-over-year. Downtown leasing was also impressive in May, up 71.2% from April. The 510,000 square feet of leasing activity Downtown in May was double the volume from a year ago.

Midtown leasing fell off the cliff in May due largely to the lack of a major lease deal. In both April 2017 and May 2016 Midtown landed a lease in excess of 500,000 square feet. With the lack of a mega-deal, leasing in Midtown was just 420,000 square feet, down approximately 76% from April's 1.76 million square feet of activity and well below the 1.86 million square feet registered in May 2016.

Caggiano says that despite some blips in asking rents, due in part to the availability of new office product Downtown for example, the office market thus far in 2017 has in large part mirrored its strong performance for most of the first half of 2016.

The average asking rent in Midtown South in May 2017 was $67.85-a-square-foot, up from $66.57 a year earlier. Downtown rents rose sharply from $58.56 in May 2016 to $63.28-a-square-foot last month. Midtown was the only region in the borough that saw rents decline, falling from $82.80-a-square-foot in May 2016 to $81.77-a-square-foot in May 2017.

Not reflected in Collier's overall availability numbers was J PMorgan Chase's expansion at Five Manhattan West to nearly 428,000 square feet that was announced earlier this month.

Instant Insights /

NYC Office Market Continues Strong, Stable Performance

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