Manhattan's Office Market Starts 2015 on Positive Footing

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According to CBRE's Manhattan Office MarketView for the first quarter 2015, the Midtown and Midtown South market's office leasing activity started 2015 on a positive note, yet Downtown's office leasing activity was a little tempered in the same quarter.
 
Here is a recap of CBRE's Q1, 2015 Manhattan Office Market report:
 
Midtown - Leasing totaled 4.53 million sq. ft., 15% above the five-year quarterly average of 3.93 million sq. ft., and 9% ahead of Q4 2014 leasing. The 550,000-sq.-ft. renewal and expansion commitment by Publicis at 1675 Broadway marked the largest transaction in Midtown. Four of the top five transactions involved a renewal component. Absorption ended the quarter at negative 1.86 million sq. ft., as seven blocks of space greater than 150,000 sq. ft. were added to the market during the quarter. Midtown's quarterly availability rate, at 11.2%, is up 70 basis points (bps) from last quarter but down 80 basis points from Q1 2014. Q1 2015's average asking rent increased slightly to $76.15 from $74.92 in Q4 2014 and rose 3% from a year ago.
 
Midtown South - Leasing activity in Q1 2015 totaled 1.39 million sq. ft., 9% above the five-year quarterly average of 1.27 million sq. ft. Of the three markets, Midtown South saw the smallest negative absorption, at negative 180,000 sq. ft. The Midtown South availability rate increased 20 basis points (bps) compared to Q4 2014, and dropped 60 bps from one year ago. The average asking rent is up slightly from Q4 2014, and up 6% from Q1 2014. The five new blocks greater than 50,000 sq. ft. to hit the market this quarter are spread out among five of the six Midtown South submarkets. The addition of large blocks offset Midtown South's shrinking vacancy rate, which held steady at 5.5%.
 
Downtown - During Q1 2015, Downtown leasing activity totaled 1.15 million sq. ft., 13% lower than the five-year quarterly average of 1.32 million sq. ft. Absorption ended Q1 2015 at negative 1.5 million sq. ft.--mainly due to 1.2 million sq. ft. of direct space added at 28 Liberty Street. Due to large blocks of space added during the quarter, the availability rate increased an additional 160 basis points (bps) compared to Q4 2014, but dropped 140 bps from last year. Despite quiet leasing activity, rents in Downtown continue to soar, setting an all-time record of $56.94. This is up 10% from Q4 2014 and up 17% from a year ago.