The PATH to rebuilding / Progress Report
New report says Downtown office market is rebounding
National real estate services firm Studley released Tuesday its 2005 Third Quarter Report in which Manhattans leasing activity is reported to have slowed to neutral.
According to the report, overall leasing activity in the city declined by 27.5 percent from last quarter and was down 33.1 percent from last year. The overall availability rate Downtown declined over the past quarter to its lowest level in a year, 14 percent, largely due to shrinkage of sublease space and to the large blocks of space being absorbed.
The report said there are currently 18 contiguous blocks of 100,000 square feet or more available Downtown, compared to 20 last quarter, and 21 last year. The Firemans Funds transaction for 53,375 square feet and Assurants for 50,000 square feet, both at 1 Chase Manhattan Plaza, were among examples offered in the report as reasons for the space absorption.
Rental rates in Lower Manhattan now average $35.84 per square foot whereas overall rent in Manhattan averages $42.58 per square foot. Rental rates have been steadily rising in Lower Manhattan over the past six quarters and the report indicated that the balance of power has shifted: tenants are no longer in a more favorable position than landlords.
According to Joyce Geiger of National Research Services, the citys employment base has been expanding at a respectable rate. Several industry sectors posted employment gains, including financial services, professional and business services, heath, education and construction, which posted its strongest growth since October 2001.
Employment growth fuels leasing activity, said Geiger.
And so the report concludes that looking forward to continued economic expansion and a stable local political environment, employment rates should continue to grow, and this should fuel an increase in leasing activity.