Sales and leasing activity is booming in a revitalized New York commercial real estate market, reflecting restored investor confidence. Although Manhattan vacancies rose and rents fell, after an influx of lease supply, Midtown and Midtown South both saw improvement. See the following article from Property Wire for more on this.
Leasing and investment activity in the New York commercial real estate market is strongly up year on year, according to a new report.
During the first nine months of 2010, the value of commercial property investments closed and under contract in Manhattan totaled $9.4 billion, up 168% from the $3.5 billion of investment transactions completed in all of 2009, the third quarter report from Cushman & Wakefield shows.
In Midtown, closed property sales, excluding properties in contract, totaled $6.3 billion, up 103.5% from the $3.1 billion completed last year. In Midtown South, closed property sales totaled $1.1 billion, up 370.2 % from the $235 million completed last year. And in Downtown, closed property sales totaled $611 million, up 213.3% from the $195 million completed last year.
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‘The increase in investment activity year to date is significant for the market overall, despite the fact that last year set an extremely low benchmark,’ said Joseph Harbert, Cushman & Wakefield’s chief operating officer for the New York Metro Region.
‘What this level of activity suggests is that investors have taken note of improving market fundamentals and have identified Manhattan as a primary investment target,’ he added.
New leasing activity, an indicator of market demand for available office space, rose 65.8% for the first nine months of 2010 as compared to the same period in 2009. Leasing activity overall measured 18.8 million square feet as of the end of September, compared with 12.6 million square feet through the first nine months of 2009 and 16.3 million square feet for all of 2009.
Despite the growth in leasing, the overall average vacancy rate was up slightly to 10.9% at the end of September from 10.8% at the end of June. The increase was due largely to the addition of more than two million square feet of available space in three Downtown Manhattan properties, approximately 1.5 million square feet of which was related to Goldman Sachs’ relocation to its new headquarters. The Downtown vacancy rate rose to 12.1% at the end of September from 9.9% at the end of the second quarter.
In contrast, Midtown and Midtown South both experienced vacancy rate declines in the third quarter. Midtown’s vacancy rate declined substantially to 11% at the end of September from 11.5% at the end of June. Midtown South’s vacancy rate declined slightly to 9.2% from 9.3% in the same time period.
At the end of September, overall average asking rents in Manhattan registered $53.80, down from $54.31 at the end of the second quarter. Average asking rents for class-A space declined to $60.69 from $61.33. In Midtown, both average asking rents and class-A average asking rents rose in the third quarter.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.