No tower is immune from the ravages of the ever deepening economic collapse. Not even Manhattan’s so-called trophy towers, known as such because their outrageous prestige and sky-high rents render them must-have items among top investors.
So concludes Jones Lang LaSalle, which gave The Observer its most recent, and still unreleased, 2008 Skyline Review.
Since July, average asking rents at trophies like 9 West 57th Street, the GM Building and 7 World Trade Center have dropped 6.2 percent, from $109.61 a square foot to $102.85. Given how much more negotiable asking rents are these days, we’re guessing the taking rents are probably below $100. Either way, that means substantial savings for tenants.
Researchers at JLL identify trophy properties as a subset of the overall Class A office sector. And that sector, too, has proven permeable to economic malaise. According to the review, in the one month separating the end of November from the end of October, average Class A asking rents dropped from $84.72 to $83.10 a square foot. Moreover, a number of leases in the works were re-traded at 10 to 15 percent below the original terms.
JLL’s wonk in chief James Delmonte said, in a statement, that he expects the situation will only worsen: “For the overall Class A office market, we are projecting asking rents to decline by as much as 25 percent to 30 percent by year-end 2009.”