The Manhattan office market is set for a stable 2003 despite a disappointing 2002, according to research by Cushman & Wakefield (C&W).
Bruce Mosler, president of US operations at C&W, pointed out that “the Manhattan vacancy rate is well below the national average”.
At the end of 2002 the average vacancy rate for central business districts across the US was 14.8%, 2.8% higher than Manhattan’s 12% average.
But Ken Krasnow, senior managing director and head of C&W’s New York office, was more cautious about the year ahead.
He said: “If the market experiences any more major space additions due to corporate downsizing, we’ll be looking at higher vacancies by the end of this year.
“Midtown South and Downtown should see their vacancy rate decline by the end of 2003, while Midtown will face some challenges due to the delivery of new construction at Times Square Tower, 300 Madison Avenue and Columbus Circle.”
According to C&W Research, Manhattan’s overall leasing activity for 2002 totalled 20.8m sq ft (1.9m), up 1.9m sq ft (176,510 sq m) on the 2001 level of 18.9m sq ft (1.8m).
At the end of 2002, the overall office vacancy rate in Manhattan was 12%, up from 9% a year ago. But the rise in vacancies slowed significantly from the third quarter 2002, when they stood at 11.8%.
Average rents have declined to $42.96 (£26.80) per sq ft ($462.43 (£288.47) per sq m) from $46.67 (£29.11) per sq ft ($502.37 (£313.39) per sq m) a year ago and $44.13 (£27.53) per sq ft ($475.03 (£296.34 per sq m) at the end of the third quarter.
Fields including law, insurance, membership organisations and engineering anticipate job growth in 2003, offering the possibility of a boost to the New York market.
EGi News 14/01/03
