CBRE ISSUES JANUARY 2013 MANHATTAN MARKETVIEW SNAPSHOT
(The following is a reformatted version of a press release issued by CBRE Group, Inc. and received via electronic mail. The release was confirmed by the sender.)
CBRE ISSUES JANUARY 2013 MANHATTAN MARKETVIEW SNAPSHOT
CBRE’s Report Finds Overall Manhattan Leasing Activity Up Strongly in December 2012, but Down 20% Year-Over-Year from 2011
Average Asking Rents Rose Across All Three Markets on a Monthly and Yearly Basis
New York, NY - January 10, 2013--
Manhattan logged 1.98 million square feet of leasing activity in December, 55% above the 1.28 million sq. ft. recorded in November, but 22% below December 2011’s 2.53 million sq. ft. of activity. Full-year leasing for Manhattan totaled 22.32 million sq. ft., 20% below 2011’s full-year total of 27.88 million sq. ft. Manhattan experienced 160,000 sq. ft. of positive absorption in December, resulting in a slight improvement to the full-year net absorption level, which ended the year at negative 5.87 million sq. ft. Notably, all three Manhattan submarkets registered negative absorption in 2012. By comparison, Manhattan logged 6.28 million sq. ft. of positive absorption in 2011.
The Manhattan-wide availability rate, at 11.9%, was unchanged from the previous month, but was up 120 basis points year-over-year. At year’s end, Manhattan’s average asking rent stood at $58.84 per sq. ft., up $0.85, or 1%, from the previous month, and $5.73, or 11%, from 2011’s year-end average asking rent of $53.11 per sq. ft.
Among the report’s highlights:
Midtown - Saw 1.35 million sq. ft. of leasing in December, topping its five-year monthly average of 1.16 million sq. ft. by 16%. Full-year leasing activity totaled 12.84 million sq. ft., 23% short of the previous year’s full-year total of 16.77 million sq. ft. December’s above-average activity offset new availabilities added to the market, resulting in 760,000 sq. ft. of positive absorption for the month. However, total absorption for the year remained in negative territory, at negative 2.44 million sq. ft. By comparison, Midtown saw 1.55 million sq. ft. of positive absorption in 2011. The Midtown availability rate ended the year at 12.0%. Midtown’s average asking rent stood at $67.80 per sq. ft. at year’s end, up $0.97, or 1%, from the previous month, and $5.37, or 9%, year-over-year.
Midtown South - Leasing activity totaled 280,000 sq. ft. in December, 13% below the market’s five-year monthly average of 320,000 sq. ft. On an annual basis, the market logged another blockbuster year of leasing, with 2012’s 5.00 million sq. ft. of total activity falling just shy of the previous year’s record-setting level of 5.25 million sq. ft. The month’s 180,000 sq. ft. of positive absorption was largely due to space withdrawals and a relatively low level of new availabilities. The 2012 full-year absorption level stood at negative 190,000 sq. ft. The availability rate ended 2012 at 8.6%. The average asking rent rose by $0.86, or 2%, during December to a new all-time high of $55.14 per sq. ft. Year-over-year, the average asking rent was up $9.80, or 22%.
Downtown - Recorded 350,000 sq. ft. of leasing in December, 6% above its five-year monthly average of 330,000 sq. ft. Full-year leasing activity for 2012 totaled 4.48 million sq. ft., trailing 2011’s robust level of 5.86 million sq. ft. by 24%. A 1.04 million-sq.-ft. block of new direct space at 4 World Trade Center, currently under construction, fell within 12 months of tenant possession in December, fueling the month’s 780,000 sq. ft. of negative absorption and pushing the full-year net absorption level to negative 3.23 million sq. ft. By comparison, Downtown logged 2.54 million sq. ft. of positive absorption in 2011. The 4 WTC space also drove a 90-basis-point monthly increase in Downtown’s availability rate, which ended the year at 14.2%. With some 4 WTC space priced above the previous month’s average asking rent, Downtown’s average asking rent rose by $1.47, or 3%, during the month to $46.85 per sq. ft. For the year, the average asking rent increased $7.55, or 19%.
Capital Markets - East End Capital and GreenOak Real Estate purchased 321 West 44th Street from Kushner Companies for $92.5 million ($406 per sq. ft.).
American Realty Capital New York Recovery REIT purchased 229 West 36th Street from Real Estate Capital Partners for $64.9 million ($461 per sq. ft.).
RFR Realty, East End Capital and GreenOak Real Estate purchased 285 Madison Avenue from WPP Group (Young & Rubicam) for $189.25 million ($357 per sq. ft.).
Princeton International Properties purchased 104 West 40th Street from Savanna for $105 million ($499 per sq. ft.).
Quantum Global and LaSalle Investment Management purchased a 49.5% interest in 521 Fifth Avenue from SL Green for $156.1 million ($644 per sq. ft.). The full valuation of the building is approximately $315.4 million. You can find this and other CBRE New York Communications by clicking here.
About CBRE Group, Inc. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.
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