Manhattan Average Asking Office Rents Up 7% Annually

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According the CBRE's latest Manhattan Office Market Snapshot Report, Manhattan office leasing totaled 2.25 million square feet during February 2015, 4% higher than the five-year monthly average of 2.18 million sq. ft. Monthly absorption nearly escaped negative territory this month, at negative 75,000 sq. ft. At 11.1%, Manhattan's availability rate in February remained steady from January's total.  The average asking rent finished the month at $68.05 per sq. ft., up 7% from the $63.68 per sq. ft. average reported one year ago.
 
Manhattan Office Market Highlights for February 2015 Include:
 
Midtown - Leasing activity in February totaled 1.23 million sq. ft., 8% below the five-year monthly average of 1.33 million sq. ft. Year-to-date leasing totaled 2.91 million sq. ft.--on par with year-to-date leasing for the same period in 2014. The largest transaction in Midtown was the 550,000-sq.-ft. renewal and expansion by Publicis at 1675 Broadway. Monthly absorption was up from last month to end February at negative 440,000 sq. ft. The availability rate increased 20 basis points (bps) compared to January, yet decreased 80 bps from one year ago. February's average asking rent was essentially unchanged from January's $75.57, but up 3% from a year ago.
 
Midtown South - Leasing activity in February totaled 0.60 million sq. ft., 43% ahead of the five-year monthly average of 0.42 million sq. ft. For the second month in a row, all five of the top transactions in this market were new deals, led by the 148,000-sq.-ft. new space commitment by WebMD LLC at 395 Hudson Street. Absorption crept into positive territory to end February at 137,000 sq. ft. At negative 19,000 sq. ft., year-to-date absorption remained barely in negative territory. February's availability rate decreased 20 basis points (bps) compared to January, and dropped 80 bps from one year ago. The average asking rent increased by $1.08 to end the month at $66.70, up from $65.62 in January and up 5% from a year ago.
 
Downtown - Leasing activity totaled 0.42 million sq. ft., 5% lower than the five-year monthly average of 0.44 million sq. ft. For the second month in a row, all five of Downtown's top transactions were new transactions, led by the 235,000-sq.-ft. lease by WeWork at 85 Broad Street, which accounted for 56% of the market's total leasing activity. Due to strong leasing and minimal large space additions in February, the month ended with 0.23 million sq. ft. of positive absorption. The availability rate decreased 30 basis points (bps) compared to January, and dropped 160 bps from one year ago. Again setting a record, the average asking rent in February increased to end the month at $55.28, up from $54.84 in January and up 14% from a year ago.