Cushman and Wakefield issued its first quarter report on commercial leases. Guess what? They think the market looks pretty good!
There was special attention paid to lower Manhattan–and the squabbles over whether the district can absorb the millions of square feet of new office space called for in the plans for Ground Zero. Despite an increase in vacancy rates this quarter, the report argues for continued development in the financial district.
Full press release after the jump.
- Tom McGeveran
Cushman & Wakefield
Dept. of Corporate Communications
For immediate release
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CUSHMAN & WAKEFIELD’S 1Q REPORT SHOWS MANHATTAN OFFICE RENTS ARE ON THE RISE
Rents driven up by competition for existing space and new construction; largest tenants lock in room for growth as available space declines
NEW YORK, April 4, 2006 – Cushman & Wakefield today released its first quarter report for the Manhattan commercial real estate market showing rents rising across the city’s three major office markets of Midtown, Midtown South and Downtown.
Average asking rents for Manhattan office space reached $43.20 per square foot at the end of March, their highest point in three and a half years, compared to $40.58 at year-end 2005. The rent rise comes as overall leasing activity slowed in the first quarter, totaling 5.4 million square feet, down 19 percent from 6.7 million square feet in the first quarter of 2005.
More significantly, the number of tenants willing to pay a premium for the city’s most expensive space has jumped dramatically. In the first quarter alone, 15 leases were completed at rents of more than $100 per square foot, compared to just 10 in all of 2005.
Joe Harbert, Cushman & Wakefield’s chief operating officer for the firm’s New York Metro Region, said the rising rents are attributable to “a limited supply of available high quality space in Midtown, competition among tenants for existing space, and the addition of newer buildings to the market at significantly higher rents, which together tend to pull asking and effective rents up.