Manhattan rents fall 5.2%
Office space rents in Manhattan have fallen 5.2% in Q3 compared to Q2, and landlords continue to have to cut prices in order to gain new lettings. The average asking rent is now $50.98 a square foot down from $53.76 per sq ft in Q2. Class A rents in Manhattan declined 6.4 percent to $62.38 a square foot in the period. Potential occupiers are well aware of the state of the market and so are negotiating hard when it comes to leasing terms. Rent free periods are commonplace for larger requirements, as well as help with fit-out costs.
Rents are down 27% in Q3 this year compared to Q3 2008. The availability of sublet space has increased to 17.5 million sq ft, putting further downward pressure on rents. In lower Manhattan, rents fell 5.5 percent to $40.22 a square foot. However leasing volume increased to 7.8 million sq ft, the highest since Q1. Experts think that because there has been a rise in completed deals, and that availability is slowing, that the market is close to “bottoming” out.