After being outmatched by both Midtown South and Downtown during most of 2011, Midtown got off the mat in January as its overall vacancy rate tumbled to 10.9 percent from 11.6 percent in December (its lowest figure since the 10.2 percent of December 2008).
Total availability sank by almost a million square feet with both direct and sublet space down significantly. In addition, all classes of inventory (A, B and C) recorded a reduced vacancy rate. Furthermore, five of the six Midtown submarkets saw vacancy rates drop—the one punch to the gut was Rock Center, which did see an overall increase (to 7.7 percent from 6.9 percent). And though Midtown won the January round, it has yet to take the match. A continuation of the financial services overhaul (a.k.a. layoffs) is expected to release yet more availability, including a couple of blocks from foreign banks that signed new Midtown leasing transactions in just the past year.
Meanwhile, the growth engine of the local economy continued to be “techmunications” and that sector helped both Downtown and Midtown South stand up strong in January as well. Don’t yet count Midtown out but the fight is far from over.
Robert Sammons, Cassidy Turley