Cassidy Turley Says Manhattan Office Vacancy Rate Remains Stable

NEW YORK CITY—Brokerage firm Cassidy Turley says that despite a dearth of large office lease deals in Manhattan, the borough's office vacancy rate remained at 9.5% at the end of October.

In its report released today, Cassidy Turley notes that direct available space continues to decline in Manhattan, while a jump in the available sublease supply, mostly in Midtown, kept availabilities flat.

Asking rents are on the rise in the city. Class A asking rents jumped $0.40 per-square-foot to $76.14 in October, which was 7.1% higher year-over-year. Class B asking rents rose $0.07 per-square-foot to $58.24 in October. However, that asking price was 6.7% more than the price posted a year ago.

Midtown South continued to tighten with the availability rate dropping 30 basis points in October to 7.6%.

The market posted 250,479 square feet of positive absorption, which brought the year-to-date total to more than 825,000 square feet and puts Midtown South on pace to double the space absorbed in 2013, Cassidy Turley reports.

The Midtown and Downtown markets had negative office space absorption in October. Over the last two months the Midtown market showed signs of a slowdown, posting two consecutive months of negative absorption after its availability rate reached a six-year low of 9.7% in August. Four blocks of sublease space greater than 45,000 square feet hit the market in October, which pushed the available sublease supply to over 4.5 million square feet for the first time in five months.

Following eight consecutive months of positive absorption totaling more than 3.1 million square feet, the Downtown office market recorded negative 67,835 square feet of absorption in October.

The 188,000-square-foot block of space placed on the market at 1 State Street Plaza combined with three additional blocks of space between 32,000 and 40,000 square feet and minimal leasing activity last month led to this negative absorption, Cassidy Turley states in its report.

Those factors also caused the availability rate to rise10 basis points to 9.9%.