Savills Studley research says deal volume in New York's office market fell to 6.9 million square feet in the first quarter of 2015. It has decreased during every quarter since the fourth quarter of 2013, when it peaked at 12.7 million square feet. The reduced activity is due primarily to more limited leasing downtown, where first quarter volume (1 million square feet) was the weakest since midyear 2013.
This outlook comes from the firm's NYC Q1 2015 report. Also of note from the report:
Asking rents push higher. The average asking rent for class A space in Manhattan rose by 3.6% to $79.47 as a 5.8% jump in class A asking rents Downtown, offset a decline of 0.8% in Midtown’s rate to $85.50.
Availability rate inches lower. Manhattan’s class A availability rate was unchanged at 12.7%. Decreases in Midtown (-0.4pp to 11.9%) and Midtown South (-0.3 pp to 5.1%) offset a 1.6 pp increase to 17.6% Downtown.
Tenants face higher rents, but concessions remain elevated. The report explains that many tenants will encounter more inflexibility regarding initial taking rent in today’s market. The good news, however, landlords taking this approach are extending generous concessions in order to secure lease commitments from creditworthy tenants in a timely fashion.Leasing Falls for Fifth Straight Quarter
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National Office Sector Report (Q4 2014)