By Sarah Trefethen
RICHARD PERSICHETTI
Manhattan?s prime office area got its groove back this summer, according to third-quarter data released by Cassidy Turley last week.
?Midtown is really starting to get its legs behind it, meaning year to date 1,490,127 s/f of absorption,? said Richard Persichetti, vice president of research, marketing and consulting at Cassidy Turley. ?Midtown hasn?t seen this absorption in three years.?
Most of the midtown leasing activity took place this summer, with 602,449 s/f signed in August alone.
Average Class A asking rent in the neighborhood has stayed fairly steady at $77.54 psf, but the average asking rent for Class B space in Midtown has risen 55 cents since July, to $56.28 psf. The uptick in Midtown leasing is in keeping with a citywide return by tenants to leasing large blocks of space.
In February this year, there were 81 blocks of space over 100,000 s/f available in the city, according to Cassidy Turley, but that number has now dropped by 12, to 69.
?I think firms basically started to make decisions, and rather than waiting to see if the market is going to skyrocket,? Persichetti said.
The economy may be making companies more comfortable with leasing commitments. Manhattan office employment is up one percent year-over-year, according to Persichetti.
?There?s been slow but steady job creation in Manhattan,? he said. Midtown South, meanwhile, saw a negative absorption of 243,963 s/f in August. But with a year-to-date positive absorption of 303,850 and a vacancy rate of 8.7 percent, it?s still the tightest market in the city.
Asking rent for Class B space is now higher in Midtown South ($60.04 psf) than in Midtown, a statistic that Persichetti said might be causing value-focused tenants to look at Midtown and Downtown instead of Midtown.
Downtown also had a good August, with 336,906 s/f of absorption. Year-to-date, however, the submarket has still added 224,459 s/f and vacancy stands at 13.6 percent.
In total, August leasing activity was up 6.5 percent from where it was last year, Persichetti said, and with rumors of more deals in the pipeline, he thinks 2013 will play out as a successful year.
?I think the market will close on just as strong or a stronger note than we?ve seen so far,? he said.
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Source: http://www.rew-online.com/2013/09/18/midtown-market-hitting-its-stride-says-cassidy-turley/
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