(BN) Manhattan Second Quarter Office Rents Fall by Record (Update1)

this is actually getting boring now..ill have to let up for a while..just so much material Manhattan Second Quarter Office Rents Fall by Record (Update1) 2009-07-14 15:56:58.408 GMT (Adds neighborhood rents, vacancies in fifth paragraph.) By David M. Levitt July 14 (Bloomberg) -- Manhattan office rents fell by a record 7.4 percent in the second quarter as landlords adjusted to job losses and... [more]

this is actually getting boring now..ill have to let up for a while..just so much material Manhattan Second Quarter Office Rents Fall by Record (Update1) 2009-07-14 15:56:58.408 GMT (Adds neighborhood rents, vacancies in fifth paragraph.) By David M. Levitt July 14 (Bloomberg) -- Manhattan office rents fell by a record 7.4 percent in the second quarter as landlords adjusted to job losses and fallout from the shrinking financial services industry, property broker Cushman & Wakefield Inc. said. Rents declined to $60.23 a square foot from $65.01 in the first quarter, New York-based Cushman said in a report today. The vacancy rate rose to 10.5 percent, up from 7.1 percent a year earlier. Vacancies may rise to 14.3 percent by mid-2010, the highest since 1996, Cushman said. Demand for office space fell as the city lost 108,000 jobs since August 2008, according to figures from city Comptroller William Thompson. More than 11 million square feet of space was available for sublease in the second quarter as financial firms sought to shed offices they no longer needed. “We saw a tremendous increase in sublease space in the first quarter and that space was priced very aggressively,” Kenneth McCarthy, Cushman’s director for New York research, said in an interview. “So landlords were forced to meet that, and as a result they lowered their rents.” Vacancies are being driven by the recession and mortgage- related losses and writedowns which led to the bankruptcy of Lehman Brothers Holdings Inc., the demise of Bear Stearns Cos. and the takeover of Merrill Lynch & Co. Neighborhood Rents In Midtown, the vacancy rate rose to 11.7 percent from 10.5 percent in the first quarter. Rents fell 8.8 percent to $66.82 a square foot. In lower Manhattan, vacancies rose to 8.7 percent from 8.1 percent and rents dropped 1.7 percent to $43.81. In Midtown South, the area roughly between 34th Street and Canal Street, vacancies increased to 8.7 percent from 8.1 percent, and rents were $49.55, down 5.6 percent. The Manhattan office market showed “some signs of relative stability” in the second quarter, a trend that has continued into this month, said McCarthy. June was the first month since February 2008 in which the vacancy rate didn’t rise. It was little changed from May. About 1.7 million square feet of leases were signed in Manhattan in June, more than in April and May, Cushman said. Midtown Manhattan, which led the decline in the market, saw 1.4 million square feet of leasing, up 29 percent from June 2008. Inflection Point? “We don’t know if June represents an anomaly or an inflection point,” said Joseph Harbert, Cushman’s chief operating officer for the New York region, at a briefing for reporters today. “Two months don’t make a trend. We’re hoping it’s a good trend.” The financial crisis has had a surprisingly “modest” impact on New York, Cushman said in a separate report. While 4.7 percent of total U.S. workers have lost their jobs through June, the rate for New York City has been 3 percent, the company said. Financial employment had been declining here since the early 1990s and the Troubled Asset Relief Program may have stemmed firings at banks, the report said. The New York City real estate market remains fragile, said McCarthy. Manhattan lost about 60,000 office jobs already and may lose another 60,000, he said. More space will also come onto the market, including the 1.1 million square-foot 11 Times Square building in Midtown. The city’s unemployment rate will reach 9.5 percent by 2010, leaving 400,000 jobless for the first time since 1993, Comptroller Thompson said yesterday. Thompson, the frontrunner for the Democratic nomination to challenge Mayor Michael Bloomberg this year, said the number of unemployed New Yorkers more than doubled to 361,100 in May from 169,700 in February 2008. For Related News and Information: Bloomberg real estate statistics: BREI New York real estate stories: TNI REL NYC Bloomberg commercial real estate stories: NI CRE BN New York City news: TNYC Bloomberg commercial mortgage securities functions: CMBH Today’s top real estate stories: TOPR [less]