NEW YORK CITY—An industry analyst is forecasting a possibledecline in average asking rents on sixth avenue and along the sidestreets stretching from 42nd to 59th streets.Savills Studley chief economist Heidi Learner says in a new reportthat in light of expected tenant relocations from the area and somespace having sat idle for some time, availability rates may trendupward, forcing landlords to get creative in marketing theirspace.

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“In the absence of activity—given upcoming lease expiries andtenant relocations—Sixth Avenue will see an increase inavailability rates,” she tells GlobeSt.com. “If that happens, thebalance of power really will shift in favor of the tenant. We couldsee higher tenant improvement allowances, free rent for a certainnumber of months, or downward pressure on rents is another possibleoutcome.”

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According to Learner, the area's current availability rate is12.4% and that could rise to 13.6% because of several blocks ofspace “becoming vacant over the next seven to nine quarters.Additionally, several moves out of the area could push theavailability rate into the high-teens.”

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Two large blocks of space at 1301 Ave. of the Americas may beavailable upon lease expiration in May, 2016: about 90,000 squarefeet on floors 34-36 and 125,000 square feet on floors 41-45.Meanwhile, two large blocks may become available when currentleases there expire in the fourth quarter of 2016. About 210,000 onfloors 26-30 and 84,000 square feet on floors 46-47 will bevacated, according to Savills' research.

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Additionally, Learner notes, “we have a few tenants that haveannounced they're going to move. Time Warner is leaving 1271 SixthAve. to go to Hudson Yards and is taking HBO with it.” Theformer firm has just under 1.9 million square feet at 1271 whilethe latter firm, which is an entity of Time, has 700 employeesspread across 1100 Sixth Ave. and 1114 Sixth Ave. “Thoseleases are not up until December 2018 but this is probably theright amount of lead time for a landlord to think about finding anew tenant.”

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Before landlords offer rent breaks or funding for build-outs,they're already trying one other measure to lure tenants:renovation. One is underway at 1271 6th Ave., Learner notes.

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Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.