NEW YORK CITY—The Manhattan office marketexperienced an exceptionally strong third quarter, according to new researchfrom Colliers International. Leasing activity came in at 8.3 millionsquare feet, 4.2% higher than the eight million square feet lastquarter and 31.3% more than the 6.3 million square feet a year ago.Year-to-date leasing of 28.1 million square feet is a 35% increaseover the 20.8 million square feet from the first nine months of2013.

|

The overall average asking rent increased to $65.97 per squarefoot, up 2.3% from $64.46 per square foot last quarter and 10%higher than the $59.98 per square foot price reached a yearago.

|

Midtown recorded 3.3 million square feet of leasing activity,down 17.5% from four million square feet last quarter but betterthan the 3.1 million square feet leased in a year ago. Year-to-dateleasing of 11.9 million square feet is 9.8 % greater than the 10.8million square feet recorded during the first nine months of2013.

|

Representing the sixth consecutive quarter of increases, Midtownaverage asking rent reached $75.74 per square foot, a 2% rise from$74.29 per square foot last quarter, and a 9.7% spikeyear-over-year. Average asking rents are now at their highestquarterly average since they reached $85.76 per square foot in thefourth quarter of 2008.

|

Recently renovated or repositioned buildings continue to attracttenants in Midtown South, with TAMI sector companies continuing tolead the market. Overall leasing reached 2.9 million square feetthis quarter, up 48% over the 2 million square feet achieved bothlast quarter and a year ago. Midtown South registered 9.8 millionsquare feet of leasing since January, 57.6% higher thanyear-over-year levels.

|

Marking the 15th consecutive quarter of increases in averageasking rent, Midtown South reached $58.19 per square foot, up 3%from $56.47 per square foot last quarter and up more than 9%from the $53.23 per square foot price achieved a year ago.

|

The Downtown submarket continues to attract new tenants fromvarious industries, registering 2.1 million square feet of leasingin the third quarter. That's nearly a 5% increase from 2 million inQ2 and up 70% from the 1.2 million square feet leased a year ago.Year-to-date leasing of 6.5 million square feet is 71% higher thanthe 3.8 million square feet from the comparable period in 2013,represents the highest level of leasing activity recorded Downtownsince the first nine months of 2000.

|

Average asking rents continue rising Downtown as landlords areencouraged by sustained leasing activity, new office and retailconstruction, transportation infrastructure improvements and agrowing residential population.

|

Upward re-pricing by landlords and the removal of lower-pricedblocks of space drove average asking rents to $51.70 per squarefoot, up 5.6% from $48.96 per square foot last quarter, and up 8.9%from $47.48 per square foot a year ago. Even more significantly,these asking rents are the highest ever recorded Downtown.

|

“The Manhattan office market is experiencing across-the-boardgains in most of the key fundamentals, in some cases evensurpassing pre-recession peak performances,” says Joseph Harbert,president of the eastern Region for Colliers. “We are on pacefor a stellar 2014, with Midtown South and Downtown continuing tolead the way, and an increasing impact of future deliveries comingalong the Far West Side.”

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

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.