Manhattan Office market on the road to recovery?
The office space market in Manhattan could be on the road to recovery very soon as job losses slow and company bosses become more confident. Experts say that a lot of “correction” has already taken place and that in the next 6 to 12 months could be the start of the recovery. On 12 months ago prices have fallen 12% and rents have fallen 28%, demonstrating just how difficult a period this has been for real estate companies. Rents could even fall another 10 – 15 % this year, but will bottom out by the start of 2010.
SL Green who manage over 23 million sq ft of office space in Manhattan have focused on being a low cost office company and retaining current tenants – often with lucrative incentives. This strategy has meant that their vacancy rate of 3.8% in Manhattan is below the overall average of 9%.
They signed nearly 300,000 sq ft of office space in quarter one of this year at an average of $52.71 a square foot. This contrast with CB Richard Elliss midtown Q1 average of $65.59 a square foot. However this does not include incentives from SL such as free rental periods.