Addition of High-Priced Blocks of Space Drive Notable Rent Increases
April 17, 2019
New York City – Manhattan’s office market opened 2019 with record-setting average asking rents of $78.75 per square foot but also 1.2 million square feet of negative absorption, in a mixed first quarter following a very strong 2018. The findings were released in a quarterly research report from Transwestern Commercial Services.
Leasing activity for the quarter topped 7 million square feet, down 3% from the same period last year. Despite the decline, 25 new leases exceeding 50,000 square feet were signed, including seven that topped 100,000 square feet.
“It is notable that Manhattan had a similar first quarter in 2018 and then finished with one of the strongest years on record,” said Danny Mangru, TCS New York Research Manager. “We can see a similar pattern forming in 2019. The number of large leases signed indicate steady demand and leasing activity should pick up, given the pipeline we are tracking. Additionally, the impact of large blocks and shadow space coming back to the market has resulted in all-time high asking rents.”
Additional highlights from the report include:
- The FIRE (finance, insurance, and real estate) sectors accounted for a third of leasing activity with 11 transactions exceeding 50,000 square feet.
- The coworking sector continued to have an impact, representing 8% of quarterly leasing activity. This is down from 15% of leasing activity during 2018.
- The market added 14 blocks of space exceeding 100,000 square feet. Of those, nine are in Midtown, three are in Downtown and two are in Midtown South.
- Three all-time highs were reached for average asking rents: Manhattan overall, at $78.75 per square foot, is up 5% over last quarter; Midtown, at $85.60 per square foot, is up 7% from last quarter; and Midtown South, at $83.24 per square foot, is up 4% from last quarter and 9% year over year.
Download the full TCS first-quarter 2019 office report at: https://transwestern.com/market-reports.
ABOUT TRANSWESTERN COMMERCIAL SERVICES
Transwestern Commercial Services (TCS) is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service and innovative client solutions. Applying a consultative approach to Agency Leasing, Asset Services, Occupier Solutions, Capital Markets and Research, our fully integrated global organization adds value for investors, owners and occupiers of all commercial property types. We leverage market insight and operational expertise from across the Transwestern enterprise, which includes firms specializing in development and real estate investment management. TCS has 34 U.S. offices and assists clients from more than 200 offices in 37 countries through strategic alliances with France-based BNP Paribas Real Estate and Canada-based Devencore. Experience Extraordinary at transwestern.com and @Transwestern.
Kelsey Da Silva