POSTINGS

7.4%: While lower Manhattan boasts vacancy
rates among the lowest across the country—
with Midtown South still the tightest—the
DOWNTOWN NEW YORK OFFICE MARKET- FEBRUARY 2013 story below Canal Street can’t be told without
mentioning the availability rate, which stands
at approximately 17 percent, once you include
space opening up at the World Trade Center
DOWNTOWN NEW YORK OFFICE MARKET
and Brookfield Place, the new name
for the
Class A Statistical Summary
February
2013
World Financial Center. “It’s an interesting
While the story in Midtown South over the past two years has inarguably been Class B and, to a lesser extent, Class C buildings
Y-o-Y
Y-o-Y
Y-o-Y
Y-o-Y
Total
Direct
Sublease
Direct
Sublease
Total
Direct
Sublease
Total
Year-to-Date
time, because
that’s coming
on the
and their increasing
cachet among
tech startups,
in lower Manhattan
isVacancy
still all about
ClassVacancy
A properties.
With approxi% Change the story
% Pt. Change
% Change the space
% Change
Number of
Available
Available
Available
Vacancy
Wtd. Avg.
Wtd. Avg.
Wtd. Avg.
Leasing
Buildings
Spaceinventory
Space
Spacewith the Rate
Rate
RateTrade Center,
Rental
Rate
Rental Rate
Rental Rate
Activity
← coming online

market is←very high
quality in very ←
modern
mately five million
square
feet of new
next year
completion
of 1 World
the
market
Submarket
Inventory
buildings,” said Mr. Mazur. “That’s going to
will boast some of the most efficient and modern space in all of Manhattan. More immediately, however, approximately two milCity Hall
8
99,236
52.1%
9,489
0.1%
1.4%
1.5%
$42.00
$41.75
$41.89
-3.3%
0
increase the
overall average
asking-100.0%
rents, belion square feet of
space6,602,688
at the World
Financial
Center is expected
to 89,747
be made available
by next
month,
thanks0.5%
to lease rollovers
World
7
11,902,802
336,497major -33.3%
158,258
178,239
1.3% A space,
1.5%
2.8% the asset
-1.4% class saw
$52.39a 30
$43.77
$49.53
14.3% bringing
171,002
-9.4%
cause you’re
a lot of quality
space to
byTrade
Nomura and Deloitte,
among other
tenants. With
such availability
of Class
no wonder
Financial
Westuptick in leasing
2
663,315 last February.
49,717
-49.4%
44,196 director of
5,521
6.7%Cushman
0.8%
7.5%
-7.3%
$35.96
$0.00
$35.96
-17.0%higher rents
9,694 than you’re
22.7%
market with
seeing in
percent
from
Jonathan
Mazur,
research at
& Wakefield,
clued
The Commercial
Financial
East
21
23,378,388
2,733,123
-15.4%
2,445,853
287,270
10.5%
11.7%
$29.70
6.6%the existing
506,169 product.” 80.8%
Observer
in on some
other
big statistical
changes
in lower
Manhattan
last week
and gave
us1.2%a senseMARKETof what’s-2.3%
to come
in$46.57
2013.
DOWNTOWN
NEW
YORK
OFFICE
FEBRUARY
2013 $46.16

What’s the (Downtown) Story, Morning Glory?

Insurance

Totals

9

5,202,929

325,040

11.5%

248,542

76,498

4.8%

1.5%

6.2%

0.6%

$40.07

$38.75

$39.97

-7.7%

60,732

-9.9%

47

47,750,122

3,543,613

-15.4%

2,906,338

637,275

6.1%

1.3%

7.4%

-1.5%

$46.15

$37.97

$45.71

5.5%

747,597

29.8%

Y-o-Y
Y-o-Y
% Change
Change
%

Direct
Direct
Available
Available
Space
Space

Sublease
Sublease
Available
Available
Space
Space

Direct
Direct
Vacancy
Vacancy
Rate
Rate

Sublease
Sublease
Vacancy
Vacancy
Rate
Rate

Total
Total
Vacancy
Vacancy
Rate
Rate

Y-o-Y
Y-o-Y
% Pt.
Pt. Change
Change
%

Direct
Direct
Wtd.
Wtd. Avg.
Avg.
Rental
Rental Rate
Rate

Sublease
Sublease
Wtd.
Wtd. Avg.
Avg.
Rental
Rental Rate
Rate

Total
Total
Wtd.
Wtd. Avg.
Avg.
Rental
Rental Rate
Rate

Y-o-Y
Y-o-Y
% Change
Change
%

Year-to-Date
Year-to-Date
Leasing
Leasing
Activity
Activity

Y-o-Y
Y-o-Y
% Change
Change
%

DOWNTOWN NEW
NEW YORK
YORK OFFICE
OFFICE MARKET
MARKET
DOWNTOWN
Class
Statistical Summary
Summary
Class A
B Statistical

February
February 2013
2013

Inventory
Inventory

Total
Total
Available
Available
Space
Space

88

6,602,688
3,192,893

99,236
143,395

52.1%
17.0%

9,489
126,738

89,747
16,657

0.1%
4.0%

1.4%
0.5%

1.5%
4.5%

0.5%
0.7%

$42.00
$38.51

$41.75
$0.00

$41.89
$38.51

-3.3%
-11.1%

0
33,206

-100.0%
18.2%

74
28

11,902,802
3,618,654
663,315
3,387,600

336,497
184,961
49,717
507,730

-33.3%
-41.5%
-49.4%
-14.9%

158,258
62,648
44,196
501,549

178,239
122,313
5,521
6,181

1.3%
1.7%
6.7%
14.8%

1.5%
3.4%
0.8%
0.2%

2.8%
5.1%
7.5%
15.0%

-1.4%
-3.6%
-7.3%
-0.1%

$52.39
$41.93
$35.96
$35.00

$43.77
$24.82
$0.00
$28.00

$49.53
$36.29
$35.96
$34.91

14.3%
-16.2%
-17.0%
-19.4%

171,002
180,703
9,694
80,205

-9.4%
359.3%
22.7%
23.4%

Financial
Financial East
East

21
26

23,378,388
11,271,101

2,733,123
1,143,325

-15.4%
-17.9%

2,445,853
1,032,466

287,270
110,859

10.5%
9.2%

1.2%
1.0%

11.7%
10.1%

-2.3%
-2.2%

$46.57
$35.38

$29.70
$32.88

$46.16
$35.18

6.6%
-18.8%

506,169
172,485

80.8%
339.5%

Insurance

9
10

5,202,929
5,712,767

325,040
529,819

11.5%
15.5%

248,542
517,805

76,498
12,014

4.8%
9.1%

1.5%
0.2%

6.2%
9.3%

0.6%
1.2%

$40.07
$34.13

$38.75
$0.00

$39.97
$34.13

-7.7%
-21.2%

60,732
167,589

-9.9%
9422.1%

Totals

47
56

47,750,122
27,183,015

3,543,613
2,509,230

-15.4%
-13.1%

2,906,338
2,241,206

637,275
268,024

6.1%
8.2%

1.3%
1.0%

7.4%
9.2%

-1.5%
-1.2%

$46.15
$35.40

$37.97
$30.67

$45.71
$35.13

5.5%
-18.9%

747,597
634,188

29.8%
265.6%

Submarket
Submarket

Number
Number of
of
Buildings
Buildings

City Hall
Hall
City
World
World Trade
Trade
Financial West
West
Financial




DOWNTOWN NEW YORK OFFICE MARKET
Class B
C Statistical Summary


February 2013
Y-o-Y
% Change

Direct
Available
Space

143,395
115,764

17.0%
-75.7%

126,738
96,867

16,657
18,897

4.0%
2.3%

0.5%
0.4%

4.5%
2.7%

0.7%
-7.4%

$38.51
$36.74

$0.00
$35.01

$38.51
$36.66

-11.1%
-15.4%

33,206
18,180

18.2%
N/A

184,961
0
507,730
126,555

-41.5%
N/A
-14.9%
-25.0%

62,648
0
501,549
120,600

122,313
0
6,181
5,955

1.7%
0.0%
14.8%
8.9%

3.4%
0.0%
0.2%
0.4%

5.1%
0.0%
15.0%
9.3%

-3.6%
N/A
-0.1%
-3.1%

$41.93
$0.00
$35.00
$33.86

$24.82
$0.00
$28.00
$38.50

$36.29
$0.00
$34.91
$33.97

-16.2%
N/A
-19.4%
-21.6%

180,703
0
80,205
11,138

359.3%
N/A
23.4%
-1.5%

11,271,101
1,265,966

1,143,325
283,672

-17.9%
1.3%

1,032,466
279,840

110,859
3,832

9.2%
22.1%

1.0%
0.3%

10.1%
22.4%

-2.2%
0.3%

$35.38
$29.17

$32.88
$26.00

$35.18
$29.13

-18.8%
-32.8%

172,485
5,832

339.5%
6.4%

5,712,767
2,981,401

529,819
169,743

15.5%
9.9%

517,805
169,743

12,014
0

9.1%
5.7%

0.2%
0.0%

9.3%
5.7%

1.2%
0.5%

$34.13
$33.09

$0.00
$0.00

$34.13
$33.09

-21.2%
-23.6%

167,589
30,652

9422.1%
-55.3%

27,183,015
9,923,197

2,509,230
695,734

-13.1%
-35.5%

2,241,206
667,050

268,024
28,684

8.2%
6.7%

1.0%
0.3%

9.2%
7.0%

-1.2%
-3.4%

$35.40
$32.10

$30.67
$32.87

$35.13
$32.11

-18.9%
-25.9%

634,188
65,802

265.6%
-22.9%

Y-o-Y
% Change

Direct
Available
Space

Sublease
Available
Space

Direct
Vacancy
Rate

Sublease
Vacancy
Rate

Total
Vacancy
Rate

Y-o-Y
% Pt. Change

Direct
Wtd. Avg.
Rental Rate

Sublease
Wtd. Avg.
Rental Rate

Total
Wtd. Avg.
Rental Rate

Y-o-Y
% Change

Year-to-Date
Leasing
Activity

Y-o-Y
% Change

Submarket

Number of
Buildings

Inventory

Total
Available
Space

City Hall
Hall
City

8
34

3,192,893
4,265,623

World Trade
Trade
World
Financial West
West
Financial

14
84

3,618,654
49,500
3,387,600
1,360,707

Financial East

26
9

Insurance
Insurance

10
24

Totals

56
72

Sublease
Available
Space

Direct
Vacancy
Rate

Sublease
Vacancy
Rate

Total
Vacancy
Rate

Y-o-Y
% Pt. Change

Direct
Wtd. Avg.
Rental Rate

Sublease
Wtd. Avg.
Rental Rate

Total
Wtd. Avg.
Rental Rate

Y-o-Y
% Change

Year-to-Date
Leasing
Activity

DOWNTOWN NEW YORK OFFICE MARKET
Class C Statistical Summary
Overall

Y-o-Y
% Change

February 2013

Submarket

Number of
Buildings

Inventory

Total
Available
Space

City Hall

50
34

14,061,204
4,265,623

358,395
115,764

-46.0%
-75.7%

233,094
96,867

125,301
18,897

1.7%
2.3%

0.9%
0.4%

2.5%
2.7%

-2.1%
-7.4%

$37.81
$36.74

$39.43
$35.01

$37.90
$36.66

-12.5%
-15.4%

51,386
18,180

-14.3%
N/A

World Trade

12
1

15,570,956
49,500

521,458
0

-36.5%
N/A

220,906
0

300,552
0

1.4%
0.0%

1.9%
0.0%

3.3%
0.0%

-1.9%
N/A

$49.43
$0.00

$38.44
$0.00

$45.78
$0.00

5.7%
N/A

351,705
0

54.2%
N/A

Financial West

14
4

5,411,622
1,360,707

684,002
126,555

-20.8%
-25.0%

666,345
120,600

17,657
5,955

12.3%
8.9%

0.3%
0.4%

12.6%
9.3%

-1.8%
-3.1%

$34.86
$33.86

$31.48
$38.50

$34.81
$33.97

-19.6%
-21.6%

101,037
11,138

20.0%
-1.5%

Financial East

9
56

1,265,966
35,915,455

283,672
4,160,120

1.3%
-15.2%

279,840
3,758,159

3,832
401,961

22.1%
10.5%

0.3%
1.1%

22.4%
11.6%

0.3%
-2.2%

$29.17
$42.20

$26.00
$31.45

$29.13
$41.78

-32.8%
-3.6%

5,832
684,486

6.4%
110.8%

Insurance
Totals

24
43

2,981,401
13,897,097

169,743
1,024,602

9.9%
13.2%

169,743
936,090

0
88,512

5.7%
6.7%

0.0%
0.6%

5.7%
7.4%

0.5%
0.9%

$33.09
$35.81

$0.00
$38.75

$33.09
$35.88

-23.6%
-17.2%

30,652
258,973

-55.3%
88.0%

175
72

84,856,334
9,923,197

6,748,577
695,734

-17.3%
-35.5%

5,814,594
667,050

933,983
28,684

6.9%
6.7%

1.1%
0.3%

8.0%
7.0%

-1.6%
-3.4%

$40.57
$32.10

$34.77
$32.87

$40.27
$32.11

-7.0%
-25.9%

1,447,587
65,802

73.4%
-22.9%

Y-o-Y
% Change

Direct
Available
Space

Sublease
Available
Space

Y-o-Y
% Pt. Change

Direct
Wtd. Avg.
Rental Rate

Sublease
Wtd. Avg.
Rental Rate

Total
Wtd. Avg.
Rental Rate

Y-o-Y
% Change

Year-to-Date
Leasing
Activity

DOWNTOWN NEW YORK OFFICE MARKET
Overall Statistical Summary

World Trade: While
the overall invenNumber of
tory in the newlyBuildings
Submarket
named World Trade
City Hall
submarket
stands at 50
84,856,334
square 12
World Trade
Financial
West
feet, expect
that 14
Financial East
number
to leap to 56
Insurance
approximately
90 43
million
Totals by early next 175
year when 1 and 4
World Trade Center
hit the market. “And
that’s just the first
two buildings,” noted
Mr. Mazur. “There’s
three other Trade
Center buildings that
could be delivered at
a later date.”

NOTE: Only space that can be occupied within six months from the end of the current month is included in statistics.
Source: Cushman and Wakefield Research Services

Inventory

Total
Available
Space

358,395
-46.0% a big part
233,094
Class B and
Class C: “It’s
of the mar- 125,301
ket—it’s 521,458
a large slice-36.5%
of the market,”
220,906said Mr. 300,552
5,411,622
-20.8%
Mazur of 684,002
the combined
37,106,212666,345
square feet 17,657
35,915,455
4,160,120
3,758,159
of inventory
in lower-15.2%
Manhattan’s
Class B and 401,961
13,897,097
13.2%
Class C 1,024,602
asset classes.
“But when936,090
people are 88,512
talking about
days, they’re 933,983
84,856,334
6,748,577Downtown
-17.3% these 5,814,594
talking about the large availabilities that are
hitting the market. Who’s looking at them, and
what’s going to be left over when that hits?”
14,061,204
15,570,956

NOTE: Only space that can be occupied within six months from the end of the current month is included in statistics.
Source: Cushman and Wakefield Research Services

22 | MARCH 19, 2013  | THE COMMERCIAL OBSERVER

$46.15: While the averDirect
Sublease
age
rental rate
among Total
Vacancy
Vacancy
Vacancy
Class
A buildings
in Rate
Rate
Rate
lower Manhattan saw
a1.7%
5.5 percent0.9%
uptick, 2.5%
it’s
1.4%what brokers
1.9% are 3.3%
12.3%
0.3% year 12.6%
anticipating
next
10.5%worth mentioning.
1.1%
11.6%
that’s
6.7% will jump
0.6% signifi-7.4%
“Rents
cantly,”
said Mr.
6.9%
1.1%Mazur. 8.0%
“The space that’s being
delivered will be some
of the best space that
Manhattan has to offer—
and at higher rents in
that space than what’s
on the market today.”

February 2013

73.4%: In the first two months of this ←
year
alone, at least seven major tenants signed new
-2.1%
$37.81 50,000
$39.43
$37.90
-12.5%with
deals, all over
square feet,
compared
of that size$38.44
in 2012. HarperCollins
and
-1.9%just two$49.43
$45.78
5.7%
-1.8%
$31.48 attention,
$34.81 but deals
-19.6% by
WeWork$34.86
drew the most
-2.2%
$31.45 over at$41.78
GfK and $42.20
Liberty Mutual
55 Water -3.6%
Street
0.9%caused ripples
$35.81
$35.88comparing
-17.2% it
too. $38.75
“When you’re
a once-in-a-decade
type
-1.6%to 2011, which
$40.57 was $34.77
$40.27
-7.0% of
year, 2012 was unbelievable,” said Mr. Mazur. “So
leasing was actually down through the first two
months of last year, but it’s always hard to compare over such a strong year.”

51,386
351,705
101,037
684,486
258,973
1,447,587

506.169: Compared
Y-o-Y
with every
other sub% Change
market←and asset
class in Downtown
-14.3%
Manhattan,
Class
A buildings
in the
54.2%
20.0%East subFinancial
market110.8%
experienced
88.0% gains in
the biggest
year-over-year
leas73.4%
ing. Liberty Mutual,
AECOM and the
American Arbitration
Association led the
charge in Financial
East, said Mr. Mazur.

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