Manhattan office leasing sets new record - Real Estate Foreclosures

Tommy Fernandez - There was good news for the Manhattan office market on two fronts last week. A surge in office leasing in May pushed the year-to-date volume to 14.2 million square feet, the highest ever, according to a report from Cushman & Wakefield Inc. What's more, on the strength of that activity the overall vacancy rate slipped below 10%?albeit only 0.1 percentage point below?for the first time since March 2009.

Last month alone, tenants snapped up 4.3 million square feet of leased space, the highest one-month total on record. The figure from a year earlier was 2.6 million square feet. Even without Cond? Nast's lease of 1 million square feet at 1 World Trade Center in May, the month's total would have ranked as the highest since the end of 2004.

Predictably, the increased demand for space has pushed prices up. Asking rents hit $55.29 per square foot in May, up 1.7% year-over-year. In fact, some of the surge in leasing activity may be due to tenants' trying to lock up space before rents can rebound from levels that are still well below prerecession peaks, according to Ken McCarthy, senior managing director of research for Cushman.

He noted that many companies put off expansion plans and moves during the recession but that now they are beginning to feel like they cannot wait any longer.

?The history of Manhattan real estate is that of rent spikes,? said Mr. McCarthy. ?At the bottom of this cycle, firms believe it is a good time to conduct a transaction.?

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Source: http://www.torealestates.com/2011/06/19/manhattan-office-leasing-sets-new-record/

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