New York’s officemarkets returned to a more normal level in November, following a period of frenzied activity driven by displaced Downtown tenants scrambling to replace lost or damaged office space in October, says an Insignia/ESG report.
volume in November totaled nearly 1 million sq. ft. in Midtown and 770,000 sq. ft. in Midtown South, compared with 2.59 million sq. ft. and 1.02 million sq. ft., respectively, in October.
November’s activity included the leasing of 320,000 sq. ft. in Downtown, according to the December report. The Downtown market got a significant boost when American Express, Bank of Nova Scotia and Royal Bank of Canada announced plans to return to their Downtown offices once the necessary repairs have been completed.
"A full 80% of all space leased to Downtown tenants affected by the World Trade Center collapse was in Manhattan," said Joseph R. Harbert, chief operating officer of Insignia/ESG’s New York Metro Region. "Because a proliferation of sublease space had surfaced in Midtown and Midtown South prior to September, these locations were able to accommodate the vast majority of companies that needed immediately available replacement space."
According to the report, average asking rents in Downtown remained firm, decreasing less than $1 per sq. ft. to about $41 per sq. ft. Midtown saw a decline of about a $1 to about $59 per sq. ft., and asking rents in Midtown South dropped more than $1 to average $40 per sq. ft.
Available supply in Midtown South decreased one-tenth of a percentage point to 11.5%, whereas Downtown’s availability increased one-half of a percentage point to 11.8% and Midtown’s rate rose 0.1 point to 8.7%.
As of Dec. 1, five contiguous blocks larger than 250,000 sq. ft. were available in Downtown (up from four in October), four blocks in Midtown and two in Midtown South.