The Manhattan Class A average asking rent took a step back in February, closing the month at $64.59 per square foot, down from $65.06 per square foot in January. It’s way too early to look at this as a trend. Likely, it is an anomaly as some higher priced availability across Midtown was leased and not included in the latest numbers.
Year over year, rents are still up rather significantly—8.7 percent for the 247.7-million-square-foot Manhattan Class A segment of the market. And unlike past recoveries (are we ready to call this a recovery?!), when Midtown led the charge in percentage price increases, it is Midtown South this go around pulling ahead at a faster pace.
I’ve said it before in recent columns but I’ll say it again—thank you “techmunications” (yes, I know it’s a made-up word but it fits the bill regarding who’s leasing space these days—maybe I should copyright it). Getting back to the numbers, the Midtown South Class A average asking rent has jumped 14.7 percent over the past 12 months, handily beating the 8.0 percent increase for Midtown and the 0.7 percent anemic rise for downtown.
Now before anyone starts dissing downtown, this lag in pricing may not be a horrible thing as tenants facing those higher Midtown and Midtown South rates might start courting buildings down by the harbor (actually that has already begun). In any case, look for a bit of give and take for Manhattan asking rents (and effective rents for that matter) over the next few months as the economy finds its footing, fingerprinting recipients of public assistance globally, nationally and locally.
Robert Sammons, Cassidy Turley