Manhattan Office Leasing Update, Strong Year End Push Has Hope In The Air?   Leave a comment

After a strong start for office leasing in 2011, activity dropped off towards the end of this summer and into the fall. However, with the closing of several long awaited deals in the city, leasing activity has rebounded indicating that 2011 will produce a stronger showing in the office sector than 2010.

Last month’s activity hit approximately 3MM square feet, the highest level since June, basically insuring that leasing activity will be beyond last year’s total of just over 26 MM square feet. The major commercial real estate companies are predicting a total of approximately 30 MM square feet for 2011.

This is good news for the office sector overall which needed a strong finish to prepare for what may be a slower market in 2012. With all the question marks surrounding the global economy and European market chaos in particular, it’s possible that companies will hold off making any major decisions regarding expansion and/or opening any new locations.

It’s worth noting that average rents have begun to creep higher, jumping approximately 5% from last year’s average rate to just under $57 psf. This trend should be consistent into next year at the least which is a good sign. Though the market may be cautious heading into 2012, there are no new developments slated to open in 2013, and supply and demand should not be effected keeping rents trending higher over time as things progress.

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Posted December 16, 2011 by CBC REalta Group in CRE Trends

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