CBRE issues September 2013 Manhattan Marketview Snapshot

Manhattan recorded 1.72 million s/f of leasing during August, 8% below the 1.87 million s/f of activity logged during August 2012. Two-thirds of the way through 2013, total leasing activity for the year paced 6% ahead of 2012's year-to-date level. Manhattan logged its second consecutive month of positive absorption, though the year-to-date net absorption level remained in negative territory. The Manhattan-wide availability rate dropped 20 basis points during August to 12.5%, its lowest level since March 2013. Manhattan's average asking rent increased $0.42 during August, or 1%, to $61.49 per s/f. Among the report's other highlights: * Midtown — August leasing was 21% below the five-year monthly average of 1.17 million s/f. Year-to-date leasing continued to pace ahead of activity recorded during the same period last year. Leasing activity and space withdrawals offset new space brought to market in August, yielding significant positive absorption during the month. Year-to-date absorption remained in negative territory, although nowhere near the levels recorded during the same period in 2012. The overall availability rate edged down 30 basis points during the month to 12.3%, while the sublease availability rate fell 20 basis points to 2.5%. The average asking rent remained stable in August, rising incrementally by $0.19 per s/f. * Midtown South — August leasing was 14% below the five-year monthly average of 340,000 s/f. Total leasing so far this year lagged the 2012 year-to-date period by 24%. Following five consecutive months of positive absorption, Midtown South recorded negative absorption in August due to the addition of new availabilities to the market, the largest being 166,000 s/f at 601 West 26th St. The overall availability rate rose 30 basis points during the month, while the sublease availability rate fell 20 basis points to 2%. The average asking rent increased $0.21 in August to an all-time high of $64 per s/f. This marked the eighth time in the last 11 months that the average has reached a new record level. * Downtown — August activity topped the five-year monthly average of 350,000 s/f by 44%, making Downtown the only Manhattan market to better its historical leasing average during the month. This followed July's 580,000 s/f of activity, which outpaced the historical average by 71%. So far this year, Downtown leasing activity outpaced the same period in 2012 by 19%. The month's strong leasing easily offset new space brought to market in August—which included only two new availabilities of more than 20,000 s/f. As a result, Downtown recorded substantial positive absorption for the month. The overall availability rate dropped 50 basis points in August, while the sublease availability rate edged down 10 basis points to a Manhattan-wide low of 1.8%. The average asking rent rose $0.30 per s/f during the month. Year-over-year, average asking rents have posted a net increase of 18%. * Capital Markets Activity — American Realty Capital New York Recovery REIT purchased 333 West 34th St. from SL Green Realty Corp. for $220.3 million ($589 per s/f). The Eretz Group purchased 295 Madison Ave. from a joint venture between Westbrook Partners and The Moinian Group for $213 million ($709 per s/f). Investors associated with Ruben Companies purchased the land beneath 600 Madison Ave. from the Wallace Family for $210 million ($561 per s/f). Northwood Investors purchased 100 Broadway from a joint venture of four owners for $150 million ($381 per s/f). CIM Group purchased 5 Hanover Sq. from Savanna for $104 million ($315 per s/f).