CBRE 2013 Manhattan Office Market Snapshot

Manhattan overall recorded 2.34 million s/f of leasing activity in September, up 36% from the previous month's 1.72 million s/f of activity, and up 16% from the 2.01 million s/f of leasing logged in September 2012. Year-to-date leasing grew to 18.05 million s/f , up 7% from the 16.79 million s/f of activity during the same nine-month period last year. All three markets experienced positive absorption during September, leading to Manhattan's third consecutive month of positive absorption. The Manhattan-wide availability rate dropped 20 basis points during the month to 12.3%. Manhattan's average asking rent rose $0.35, or 1%, in September to $61.84 per s/f. Among the report's highlights: * Midtown - Leasing activity was 33% above the market's five-year monthly average of 1.18 million s/f. Year-to-date leasing activity outpaced 2012's level by 14%. The month's above-average leasing activity offset several large-sized availabilities brought to market in September, resulting in 170,000 s/f of positive absorption. The overall availability rate, at 12.3%, was unchanged from the previous month, while the sublease availability rate inched down 10 basis points to 2.4%. Midtown's average asking rent surpassed $70 for the first time since January 2009, rising $0.37 during September to $70.19 per s/f . * Midtown South - September leasing activity fell 5% short of the market's five-year monthly average of 340,000 s/f. Total leasing activity for the first three quarters of the year trailed 2012's year-to-date level by 22%. The month's leasing activity, combined with several mid-sized space withdrawals, offset September's new availabilities, resulting in 140,000 s/f of positive absorption and a 20-basis-point drop in the overall availability rate. The sublease availability rate, at 2%, was unchanged from the previous month. Midtown South's average asking rent inched up $0.21 during the month to another record-high $64.21 per s/f . Year-over-year, the average asking rent was up 20%, or $10.81 per s/f. * Downtown - Posted its third consecutive month of above-average leasing, with September activity outpacing the market's five-year monthly average of 350,000 s/f by 27%. New York City Health & Hospitals Corporation's 221,000 s/f lease at 55 Water St. accounted for almost half of the month's leasing activity. Through September, year-to-date leasing was 22% ahead of the same nine-month period in 2012. September's strong leasing activity, coupled with several large- and mid-sized space withdrawals, offset the month's new availabilities, resulting in a third consecutive month of positive absorption. The overall availability rate fell 50 basis points during the month to 14.5%. The average asking rent remained stable, inching up $0.09 per s/f in September. Compared to its year-ago level, the average was up 17%, or $6.83 per s/f * Capital Markets Activity-The leasehold interest in 130 West 42nd St. was purchased by Tribeca Associates and Meadow Partners from American Properties, Inc. for $158 million. The leasehold interest in 1 North End Ave. (NYMEX Building) was purchased by Brookfield Office Properties from CME Group for $200 million ($357 per s/f).