by Brianna Crandall — April 23, 2014—New analysis by global financial and professional services firm JLL (formerly Jones Lang LaSalle) finds that New York City’s office market continued to pick up in the first quarter of 2014, with leasing activity significantly increased compared to this point in 2013. Major deals in Manhattan have reportedly doubled in the past year, with the city recording 14 office leases of at least 100,000 square feet in 2014 compared with seven in 2013.
The healthy deal volume helped the city’s office market maintain a steady performance. Manhattan’s overall vacancy rate remained unchanged at 11.1% in the first quarter of 2014. The city’s Class A vacancy rate rose to 12.4% this quarter, an increase of 2.5% (or 0.3 percentage points) from 12.1% the previous quarter.
“Building owners are negotiating with multiple tenants for the same space,” said Peter Riguardi, president of JLL’s New York operations. “While this has been true in Midtown South for several quarters, it has now become more widespread. If this pattern continues, we can expect to see rents rise further in certain parts of Midtown.”
According to the report, rent increases at the top of the market and the removal of cheaper sublease space helped push up average asking rental rates in just about every building class and submarket in the city. Overall average asking rents in New York rose to $64.26 per square foot this quarter, an increase of 4.0% from $61.81 per square foot at year-end 2013. The city’s Class A rents grew to $70.72 per square foot in the first quarter of 2014, an increase of 2.7% from $68.83 per square foot the previous quarter.
JLL’s report further breaks down quarterly findings for the Midtown South, Midtown and Downtown areas of the city.
JLL is a leader in the New York tri-state commercial real estate market, with more than 1,600 industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2012, the New York tri-state team completed approximately 23.8 million square feet in lease transactions, arranged capital markets transactions valued at $1.57 billion, managed projects valued at nearly $7.0 billion, and oversaw a property and FM portfolio of 102.1 million square feet and an agency leasing portfolio of 76.0 million square feet.
