Downtown NYC Towers Empty as Best Market Falters
March 30, 2010
By: David M. Levitt

Downtown Manhattan, where demand for office space began to surge three years after the 9/11 terrorist attacks, is about to lose its spot as the best- performing U.S. market.

Vacancies may exceed 14 percent of the area’s 87 million square feet by late 2011, empty space that’s equivalent to four Empire State Buildings and the highest rate since 1997, according to property broker Cushman & Wakefield Inc. That doesn’t include the 4.4 million square feet of offices in two towers now under construction at the World Trade Center site. Those are scheduled for completion in 2013. ...

... The space available downtown may appeal to companies seeking accommodations at a time when rents in midtown Manhattan are expected to rise, said Mark Shapses, senior managing director at Studley.

“It’s a place where people want to be,” he said. “You’ve got water views from a lot of the properties. Mass transit is probably better than anywhere else in the city. It’s true there’s going to be some increased vacancy, but they usually end up working these out through markets. It’ll take some time to lease up but I think it will lease up.” ...

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