New York Office Market Shows Q4 Uptick! What's That, You're Not Impressed?

Grubb & Ellis released its 4th quarter Market Trends reports for all major US markets today. If you would like to receive an e-mail with a link to all of the reports, please get in touch with me at wayne.vanaken@grubb-ellis.com. To get just the New York report, click on this link.

A few key facts from the report, which looks at all of New York City, not just the Midtown South market:

• Increased leasing activity occurred in the 4th quarter, with tenants seizing the opportunities presented by 5-year low net effective rents and a decade high inventory of over 53 million RSF of available space.
• Landlords with Class A product continued to offer generous concessions on transactions with a 10-year term or higher. In order to lock in tenants long-term, an average of $60 PRSF in tenant improvement allowance and 6-8 months of free rent are being offered by savvy landlords.
• After a slow start to 2009, when lease transaction volume was down 30 percent, activity
  picked up in the second half of the year and surpassed 2008’s total volume by 5 percent
  with 25.1 million RSF leased.
• Lease renewals accounted for 40 percent of the total leasing activity in 2009, similar to the trend witnessed in 2008.
• Manhattan Class A average asking rents dropped $19.78 PRSF from 1 year ago to $65.47 PRSF, the largest 1 year decline in the past 50 years.
• Manhattan Class A net effective rents—the cost of real estate minus concessions offered by landlords - dropped $25.49 PRSF (33 percent) in 2009 to an average of $52.21 PRSF.
• Once concessions are factored in, tenants are paying 20 percent below the average advertised asking price for office space.

SIGNIFICANT Q4 2009 TRANSACTIONS

• Paul Weiss Rifkind Wharton & Garrison renewed its lease at 1285 Avenue of the Americas for 550,000 RSF
• Simon & Schuster renewed its lease at 1230 Avenue of the Americas for 275,000 RSF
• Stroock & Stroock & Lavan LLP renewed its lease at 180 Maiden Lane for 225,000 RSF