MANHATTAN OFFICE MARKET
| Total Inventory (SF) |
430,069,855 |
|
| Availability Rate (%) |
Total |
13.9% |
| |
Direct |
10.4% |
| |
Sublet |
3.4% |
| Average Asking |
Total |
$43.77 |
| Rental Rate (Price/SF) |
Direct |
$44.55 |
| |
Sublet |
$41.41 |
| Net Absorption |
2Q10 |
-638,745
|
| |
1Q10 |
2,155,280 |
| |
4Q09 |
1,272,424 |
| Under Construction (SF) |
|
7,559,741 |
After two quarters of robust absorption in the Manhattan office market, conditions slowed a bit in the second quarter of 2010 as 638,745 square feet of negative net absorption took place. Although a hindrance to the overall recovery of the Manhattan office market, net absorption remained positive for the first half of the year with the removal of 1.5 million square feet. The availability rate rose to 13.9% from 13.7% at the end of the first quarter, and remained above the 12.8% reported one year ago.
The vacancy rate rose to 8.5% in the second quarter, and was up from 7.2% reported one year ago. Average asking rents rose 2.6% to $43.77/sf in the second quarter from $42.65/sf in the first quarter. By the end of the second quarter, average asking rents were back to levels seen in 2006.
At the end of the second quarter of 2009, 17.4 million square feet of sublease space was available. By the end of the second quarter of 2010, that number had been reduced to 14.8 million square feet - or a reduction of 14.9% of the total sublet space available. Conversely, direct space increased by 8.0% over the same period of time. The sea of sublease space put on the market by firms that downsized or closed is slowly being taken off the market.