MANHATTAN

Office Market Report

August 2015

Market Starts to Heat Up in July

MARKET TRACKER (all classes; month-over-month)

Manhattan Market Snapshot

Availability: 9.4%
Net Absorption: 464,826 SF
Asking Rent:

$70.69 PSF

Deliveries:

0 SF

Overall Availability
MANHATTAN

10.25%
10.00%

The Manhattan office market heated

up in July, much like the sweltering
temperatures outside. Manhattan posted
its sixth consecutive month of positive
absorption after 464,826 square feet was
absorbed in July. This coincides with the
strong job numbers through midyear, as
office-using employment added 30,700
jobs in New York City over the past 12
months. Although availability only fell 10
basis points to 9.4 percent, this is the first
month in 2015 where all three Manhattan
markets contributed to the decline in
available space. In addition, 13 of the 17
submarkets posted a decline in the
available supply. Class A asking rents
increased $0.25 per square foot to
$77.43, while Class B asking rents jumped
$1.42 per square foot to $61.81 because of
an increase in demand in the Midtown
South market.

9.75%

Midtown Stability Continues

9.50%
9.25%
9.00%
8.75%
8.50%
Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Asking Rents
MANHATTAN
$80

Class A

$75
$70
$65

Class B

$60
$55
$50
$45

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Midtown posted another solid month with

seven of the nine submarkets having
positive absorption with 256,895 square
feet coming off the market. This brought
Midtowns 2015 absorption totals to
positive 342,353 square feet. The
availability rate decreased another 10
basis points to 9.5 percent, as the direct
available supply dropped to just under 20
million square feet for the first time since
December 2008. A total of 23 deals
greater than 100,000 square feet have
been signed through July, compared to 17
through the first seven months of 2014.
This demand has caused the availabe
large blocks in Midtown to drop from 51 to
46 in the past 12 months. Class A asking
rents increased $0.46 per square foot to
$86.12, mainly from the Fifth/Madison
asking rents increasing $0.73 per square
foot to $128.20. Class B asking rents
continue to rise, increasing $0.75 per
square foot to $62.10.

Midtown South Bounces Back

Midtown South continues to be
Manhattans hottest market with four of
the five submarkets having availability
rates below 7.0 percent. Availability
dropped 20 basis points in July to 6.7
percent. Midtown South posted positive
152,642 square feet this month, bringing
its year-to-date total to positive 222,873
square feet. Demand from the TAMI
(technology, advertising, media and
information services) sector continues to
drive the market, as it comprises 60
percent of Midtown Souths leasing
volume. Both Class A and Class B asking
rents jumped significantly throughout July,
as Class A asking rents are up by $4.94 to
$77.73 per square footthis is primarily
due to the high asking rental prices at
11 Madison Avenue. Class B asking rents
surpassed $70.00 per square foot for the
first time in history and are up $3.13 per
square foot to $71.27.

Downtown Steadies
Downtown continues to slowly chip away
at the 1.6 million square feet of space
added to the market in the first quarter.
Even with 298,655 square feet of space
added to the market at 200 Vesey Street
American Express plans to vacate a
portion of their spaceDowntown still
posted 55,289 square feet of positive
absorption which caused availability to
drop 10 basis points to 12.0 percent.
Downtown inked its two largest
relocations this year from Midtown and
Midtown South during the month of July
with Gucci and Sandbox Studio leasing a
combined 155,224 square feet. Class A
asking rents increased $0.17 per square
foot to $62.41. Class B asking rents
remained flat in July, increasing a mere
$0.07 to $44.25 per square foot, but still
increased 8.1 percent over the past 12
months.

MANHATTAN

Office Market Report

August 2015 | Statistical Data as of July 29, 2015

SUBMARKET

INVENTORY

AVAILABLE

SF

SF

AVAILABILITY

ABSORPTION
MONTHLY

UNDER

YEAR-TO-DATE CONSTRUCTION SF

AVERAGE ASKING RENT

CLASS A

CLASS B

OVERALL

$68.09

$57.18

$66.16

MIDTOWN
20,842,455

1,307,282

Fashion District

33,081,198

3,280,930

Fifth/Madison

25,192,308

2,921,398

Grand Central

50,084,883

5,817,194

11.6%

East Side/UN

6.3%

(92,393)

198,905

9.9%

6,217

(767,062)

$69.75

$55.72

$54.13

11.6%

(78,917)

9,955

$128.20

$79.29

$113.95

41,786

277,650

$73.27

$58.85

$69.19

Midtown West/Columbus Circle

21,385,133

2,155,235

10.1%

88,746

193,758

$76.58

$51.63

$71.73

Park Avenue

30,089,432

2,344,787

7.8%

76,895

570,274

$97.11

$83.69

$96.62

Penn Plaza/Hudson Yards

14,585,528

955,798

6.6%

15,988

120,603

3,204,950

$63.16

$62.35

$60.18

Sixth Avenue/Rock Center

45,141,080

3,995,995

8.9%

167,698

(338,273)

472,535

$82.43

$72.55

$80.60

Times Square

17,965,613

1,883,875

10.5%

30,875

76,543

$88.92

$63.26

$80.16

258,367,630

24,662,494

9.5%

256,895

342,353

3,677,485

$86.12

$62.10

$77.46

114,000

$54.51

MIDTOWN TOTALS

MIDTOWN SOUTH
Chelsea/Meatpacking

19,575,179

1,247,968

6.4%

9,520

213,613

$79.00

$59.99

Flatiron/Union Square

15,045,451

1,423,960

9.5%

1,485

(217,538)

$85.00

$76.48

$75.67

Hudson Square/TriBeCa

19,575,219

1,164,278

5.9%

84,746

151,406

$73.00

$72.64

$70.87

Madison Square/Park Avenue S

26,225,012

1,805,086

6.9%

69,930

(31,420)

$76.72

$65.68

$67.16

7,238,360

256,155

3.5%

(13,039)

106,812

$72.06

$72.06

87,659,221

5,897,447

6.7%

152,642

222,873

$77.73

$71.27

$67.53

4,963,218

439,403

8.9%

44,828

13,264

$48.44

$46.95

$46.13

SoHo/NoHo/Village
MIDTOWN SOUTH TOTALS

114,000

DOWNTOWN
City Hall/Insurance
Financial

53,064,463

5,607,015

10.6%

258,048

(297,201)

$53.93

$44.79

$51.20

World Trade Center

31,043,427

4,652,634

15.0%

(247,587)

(827,347)

2,861,402

$69.62

$41.25

$66.83

DOWNTOWN TOTALS

89,071,108

10,699,052

12.0%

55,289

(1,111,284)

2,861,402

$62.10

$44.25

$58.18

MANHATTAN TOTALS

435,097,959

41,258,993

9.5%

464,826

(546,058)

6,652,887

$77.43

$61.81

$70.69

Office asking rents converted to Full Service

Key Lease Transactions July 2015

PROPERTY

SF

TENANT

TRANSACTION TYPE SUBMARKET

Richard Persichetti

237 Park Avenue

270,000

J Walter Thompson

Renewal/Expansion

Park Avenue

Vice President, Research, Marketing and Consulting

Email: Richard.Persichetti@dtz.com

350 Fifth Avenue

120,000

LinkedIn

Expansion

Madison Square/Park Avenue

Lauren Hale

28 Liberty Street

101,958

Ironshore Insurance

New Lease

Financial

Research Manager
Email: Lauren.Hale@dtz.com

888 Seventh Avenue

99,948

TPG Capital

Renewal/Expansion

Midtown West/Columbus Circle

195 Broadway

83,694

Gucci

New Lease

World Trade Center

55 Water Street

68,260

Sandbox Studio

New Lease

Financial

115 Broadway

62,624

PANYNJ

Renewal

Financial

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Tel: 212.758.0800
The information contained within this report is gathered from
multiple sources considered to be reliable. The information may
contain errors or omissions and is presented without any warranty
or representations as to its accuracy.
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