Describing the recovery of both the office market and the city’s economy as “trickle up,” new preliminary data on the third quarter from Studley points up many troubling trends.
“The biggest and most established companies anchoring Midtown and Lower Manhattan are still dumping deadweight and focusing on productivity and efficiency,” the report states. Or, put another way, cost cutting is still the modus operandi for many leading firms. Landlords appear to be catering to that, as Class A asking rents slipped by 2.1%, from $68.37 to $66.91...
And Lower Manhattan continues to be the place for value. Price-conscious media, advertising and publishing firms are looking at the area. According to Studley, “Creditworthy tenants willing to commit to term can still generally negotiate a full year of free rent and generous improvement allowances up to $70...”
On the flip side, says Studley, the World Trade Center, Hudson Yards and the Avenue of the Americas—still—are the best-positioned markets to accommodate large tenants. “Current market conditions are ideal for mid-sized and large corporate users in need of high quality space, as well as those trying to consolidate multiple locations. They have a virtually unprecedented pool of options to consider.”Studley: Early Q3 Results Show Lackluster Performance
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