CBRE Group, Inc. issues May 2014 Manhattan Office Marketview Snapshot

Manhattan leasing remained strong in April, with 2.45 million s/f of activity recorded, 20% higher than the five-year monthly average of 2.04 million s/f and 25% higher than the 1.96 million s/f of activity in March. With several new large blocks of space added to the market, net absorption for the month reached negative 597,000 s/f during the month, and the year-to-date total reached negative 1.56 million s/f Manhattan's availability rate finished the month at 12.1%, down from 12.6% one year ago. The average asking rent increased to $65.04 per s/f during April, compared to $64.40 per s/f in March and $61.16 per s/f one year ago. Among the report's highlights: Midtown - Posted 1.80 million s/f of leasing activity during April, nearly double the March total of 990,000 s/f and 41% higher than the five-year monthly average of 1.27 million s/f Leasing activity year-to-date was 5.74 million s/f, 15% ahead of the 2013 year-to-date total. Absorption was restrained by new availabilities brought to market, although finishing in positive territory at 235,000 s/f However, the year-to-date net total remained in negative territory. Midtown's availability rate was 11.8% at the end of April, lower than the 11.9% rate at the end of March and the 12.7% rate reported one year ago. The average asking rent remained stable during the month, increasing $0.29 to $74.56 per s/f and was up 8% compared to $68.91 per s/f one year ago. Despite several large subleases added to the market, Midtown's sublease availability rate was stable at 2.1% and remained lower than the April 2013 rate of 2.6%. Midtown South - Leasing pace slowed during April, with 286,000 s/f of activity, falling below the five-year monthly average of 379,000 s/f for the first time in five months. Year-to-date leasing activity was strong at 1.95 million s/f, 47% higher than the 1.33 million s/f measured through April 2013. April was highlighted by the 1.07 million-sq.-ft. lease signed by Credit Suisse Group at 11 Madison Avenue, although the deal was not included in the leasing activity total since it was a renewal. Driven by several new large blocks of space added to the market, the availability rate increased to 10.7%, up from 9.4% in March and higher than the 10.2% rate one year ago. After three months of decline, the average asking rent increased to $65.45 per s/f during April, a new record high for the market and a 4% increase over the March average. Downtown - Leasing activity totaled 369,000 s/f during April, falling 5% short of the five-year monthly average of 389,000 s/f Year-to-date leasing activity was up 2% from last year's number, the smallest increase of the three Manhattan markets. Absorption was positive for the third consecutive month, with 146,000 s/f, and all three Downtown submarkets were in positive territory. The availability rate Downtown was 13.9% in April, compared to 14.0% in March and 14.2% one year ago. The sublease rate was 1.4%, the lowest of the three markets. Downtown's average asking rent continued to be driven by the upward re-pricing of available space, and finished April at $49.09 per s/f, up from $48.70 per s/f in March and $46.95 per s/f one year ago. Investment Sales -- Invesco Real Estate on behalf of the Florida State Board of Administration purchased 1370 Broadway from Normandy Real Estate Partners for $186 million ($665 per s/f). Westbrook Partners purchased 31 West 27th Street from the Walnut Hill Group for $81 million ($568 per s/f). 627 Greenwich Street was purchased by LG Acquisitions I LLC from the Royal Bank of Scotland for $75 million ($650 per s/f). A joint venture between Harbor Group International and Image Capital purchased 55 Broadway for $157 million ($439 per s/f) from the joint venture of Broad Street Development LLC and Crow Holdings.