On Rent, Good News For Midtown South
On Rent, Good News
For Midtown South
In case there are any doubts that the office-leasing market in Midtown South is hot, CompStak Inc. has come out with a new report on 2012 that should quell them.
Among other things, the report looks at the difference between the rents that landlords seek and the starting rents that they take. For example, in Midtown, that spread narrowed slightly from the first to the fourth quarter of 2012—to $4.19 a square foot from $5.41—for top, or Class A, space. In the downtown area, the difference hovered around $6 a square foot all year long.
In Midtown South, the difference practically vanished. At the beginning of 2012, average asking rents were $47.64 a square foot and starting rents were $42.64. But the fourth quarter asking rents were $52.16 and starting rents were $52.09, according to the CompStak report. The report also looked at so-called effective rents, which includes the cost to landlords of free rent, interior construction and other concessions. In Midtown South, effective rents increased a total of 30% for 2012 to $48.62 a square foot.
Overall, in Manhattan, there was 30.6 million square feet of leasing volume in 2012, down 11% from 2011, CompStak said. Eighty percent of the deals over 100,000 square feet were renewals and expansions at existing locations, while 70% to 80% of the deal volume under 20,000 square feet involved tenants moving.