AVAILABILITY PUSHES LOWER
Manhattan’s overall availability rate decreased, falling from 11.3% to 10.7%, but has decreased by merely 30 basis points from a year ago. The Class A availability rate fell by 60 basis points to 11.9%, with a 50 basis point decrease in Midtown to 10.6% and a 180 basis point decline in Downtown to 15.8%.
Manhattan’s average asking rent rose by 1.8%, from $74.99 to $76.36 in the fourth quarter. The Class A average rent increased by 2.5% to $87.90 in the quarter.
RECORD LEASING IN 2018
Leasing volume exceeded 10 msf for the second quarter during 2018, totaling 11.9 msf. Tenants leased just under 40 msf during 2018, a 14.3% jump from 2017 and the strongest annual volume in several years.
INVESTMENT SALES RISE
Office property sales through November 2018 totaled $16.1 billion, a 24% increase compared to the same period during 2017.
"Steady demand from traditional businesses, tech heavyweights, forward lease commitments for new developments, and unprecedented leasing by flexible workspace providers, resulted in record leasing activity in 2018. Even so, availability barely budged from a year ago, because of new developments coming on line. Net effective rents have actually decreased as concessions rise. "William Montana, Senior Managing Director
"Leasing activity has been running above average since the start of 2017. A recent burst in economic growth, coupled with a willingness among firms to invest in the workplace has kept volume in Midtown elevated. Even so, leasing is barely keeping pace with the delivery of new supply and continued space densification."Erik Schmall, Vice Chairman