(BN) Manhattan Office Space for Lease Increases 38%, Cushman Says

these are big #'s... Manhattan Office Space for Lease Increases 38%, Cushman Says 2010-01-12 15:23:06.457 GMT By David M. Levitt Jan. 12 (Bloomberg) -- New York has 38 percent more square feet of offices for lease than a year ago, as the economic slump and job cuts at financial firms keep demand low, according to Cushman & Wakefield Inc. Available space totaled 43.8 million square feet, or 11... [more]

these are big #'s... Manhattan Office Space for Lease Increases 38%, Cushman Says 2010-01-12 15:23:06.457 GMT By David M. Levitt Jan. 12 (Bloomberg) -- New York has 38 percent more square feet of offices for lease than a year ago, as the economic slump and job cuts at financial firms keep demand low, according to Cushman & Wakefield Inc. Available space totaled 43.8 million square feet, or 11 percent of Manhattan’s 393 million square feet of offices, at the end of 2009, the New York-based brokerage said today in a report. The vacancies, equivalent to more than 15 1/2 Empire State Buildings, are the highest since the third quarter of 2004, Cushman said. “We’re calling this close to the bottom,” said Joseph Harbert, Cushman’s chief operating officer for the New York region. “Rents will go down a bit from here, vacancies will go up a bit, but you won’t see any dramatic movements on either of those fronts in the next nine months.” Demand in New York, the biggest and most expensive U.S. office market, went into freefall following Lehman Brothers Holdings Inc.’s September 2008 bankruptcy filing. New York has lost about 40,000 financial services jobs since the first quarter of 2008, according to the city’s Independent Budget Office. The office market picked up later in the year as larger businesses began taking advantage of lower rents to renew leases early, Harbert said. In the second half of 2009, there were 9.9 million square feet of new leases signed, compared with 6.4 million in the first half, according to Cushman. There were 10 leases for more than 100,000 square feet in the fourth quarter, twice the number from the same period of 2008. Vacancy Rate Harbert said it’s a sign of stability that Manhattan’s office vacancy rate remained at 11.1 percent between the third and fourth quarters of 2009 and declined for two straight months from a high of 11.4 percent at the end of October. The rate was 8 percent at the end of 2008. Asking rents in Manhattan averaged $55.52 a square foot at yearend, down 20 percent from December 2008. Sublease space, or surplus offices marketed by tenants rather than landlords, declined to 10.6 million square feet from a peak of 11.4 million at midyear. High sublease availability tends to depress rents because tenants have less incentive to seek top dollar for the space. There was 8.2 million square feet of sublease space available at the end of 2008. Rents in Midtown Manhattan fell 22.5 percent to an average of $61.82 a square foot, Cushman said. The vacancy rate was 12 percent, up from 8.5 percent a year ago and little changed from the third quarter. Lower Manhattan rents averaged $40.36 a foot, down 15.7 percent from a year earlier. Vacancy was 9.6 percent, down from 9.9 percent in the third quarter. In Midtown South, roughly the area between 34th and Canal streets, rents dropped 12.8 percent from a year earlier to $47.17 a foot. Vacancy was 10 percent, up from 7.1 percent a year earlier and 9.4 percent in the third quarter. [less]