Manhattan Office Availability Rate Falls to 10.4%

NEW YORK CITY—Frigid temperatures, and the unpleasant combination of frequent snow and ice storms this past winter failed to put a chill on office leasing activity in Manhattan. Brokerage firm Cassidy Turley reports that the overall office availability rate in Manhattan dropped from 11.8% at the end of the first quarter of last year to 10.4% after the first three months of 2014.

In its first quarter report, Cassidy Turley says that leasing activity in Manhattan totaled a little over 9 million square feet, fueled by 16 lease transactions during the first quarter of more than 100,000 square feet.

Overall for Manhattan Class A rents increased to $73.77-per-square-foot, up $1.64-per-square-foot in the first quarter. On the other hand, Class B rents dipped slightly by $0.15-per-square-foot to $54.99-per-square-foot.

Some of the items of note from the Cassidy Turley report on the various New York City markets in the first quarter include: Class A asking rents in Midtown increased $2.08-per-square-foot to $82.11-per-square-foot in the first quarter; demand for spaces greater than 100,000 square feet in Midtown South remains high, as only seven blocks are available, the lowest in more than seven years; and Downtown Class A asking rents remained flat from the end of 2013, up only $0.06-per-square-foot to $55.36.

Cassidy Turley states in its report that it believes rents will rise throughout the year as available supply falls closer to equilibrium; Midtown and Downtown likely will see more leasing demand over the next six to nine moths as midtown south space availabilities tighten and sublease space will continue to be in high demand throughout the year as some tenants opt to ink value-oriented lease deals.