NY Office Properties: Leap in First Quarter Leasing, Sales
As office building tenants attempted to lock in good deals on falling rents and lower prices ahead of a recovery, Manhattan commercial real estate leasing and sales activity surged in the first quarter of 2010, according to a Cushman & Wakefield quarterly report.
The real estate services company reported that, during the first quarter of 2010, tenants leased 5.7 million square feet of office space--up 84 percent from the first quarter of 2009. Leasing rose 14 percent from the prior quarter, said the report. The report also shows that investors bought or were under contract to buy $3.3 billion of Manhattan commercial property in the first quarter of 2010, nearly the amount sold in all of 2009. Sales rose 200 percent over the $1.1 billion closed or under contract in the first quarter of 2009 and sellers were more willing to do deals, the company said. The report states that both domestic and global investors are becoming active again.
Additionally, rents continued to fall, reaching the lowest level in three years. At the end of the first quarter of 2010, the overall average asking rents in Manhattan fell to $55.38 from $55.52 at the end of December 2009, and from $65.01 in the first quarter of 2009. Additionally, asking rents are down 24 percent from their peak of $72.97 in the third quarter of 2008, according to the report.
Manhattan’s traditional industries--financial services, law, advertising, government, education, and social services--accounted for the most leasing activity in the first quarter of 2010, Cushman & Wakefield said.