Manhattan’s commercial real estate market has recorded the highest quarterly leasing volume in at least a decade.
But the first quarter reports were not all good news, as the prospect of office consolidation and downtown migration hint at trouble for Midtown. Some 9.4 million square feet of commercial space were leased across Manhattan in the first quarter, according to a report by Cushman & Wakefield.
This marked the highest quarterly volume ever recorded by the firm. The Manhattan-wide vacancy rate fell to 10.5 percent and the average price rose to $63.96 per s/f, up 7.3 percent from $59.60 per s/f a year ago.
Over five million s/f were leased in Midtown alone — a 70.8 percent increase year-over-year — but its vacancy rate hardly changed. This could be the result of companies using less space, Studley’s quarterly report noted.
“Downtown is surging, demand is sustained in Midtown South, but much of Midtown is right-sizing, or on the move to Lower Manhattan,” the Studley report concluded.It added that decisions by banks Chase and Credit Suisse to downsize significantly with their new leases could be a precursor to large-scale office consolidation in Midtown.
Midtown’s average rents were still by far the highest in Manhattan at $70.06 per s/f, but Downtown and Midtown South are closing in...Tech, media sectors drive Manhattan office leasing volume to an all-time high
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