C&W reports status quo on third quarter leasing market.

Leasing activity has slowed in the third quarter but remains in line with last year in the downtown market, according to Maria T. Sicola, a senior managing director in Cushman and Wakefield Inc.'s research department.

And vacancy levels in Midtown, which steadily rose last year, remain stable at 11.9 percent this year, Sicola said. Nevertheless midtown and down town still ranked among the worst metropolitan areas in terms of office space absorption--fifth and sixth worst at-1.32 and-1.25 percent, respectively. Dallas ranked at No. 1 on the "worst" at -2.29 percent, while New Haven, Conn. topped the "best" list at 6.6 percent.

Sicola addressed these points and others at the Cushman and Wakefield Asset Services Leadership Summit.

According to her, the downtown vacancy rate, though fairly steady at about 13 percent, is poised to drop, eventually hitting 10 percent in 2005 as construction on the Freedom Tower approaches completion.

The vacancy rate in midtown, also steady, is nevertheless at its highest level since the mid '90s. Yet in Midtown, the number of new "megaleases"--over 100,000 s/f--has already reached 15 this year.

"The number of large leases for this year in three quarters is already equal to what it was in 2002," Sicola said.

The midtown vacancy rate is expected to drop to approximately 11 percent in 2004 and 9.3 percent in 2005.

Meanwhile, the central New Jersey office market has stabilized at 21.8 percent after being inundated with 4.5 million s/f of vacant space last year. In northern New Jersey, the vacancy rate has grown slightly from last year to approximately 17.4 percent.

In Westchester County, vacancy rates in downtown (CBD) districts dropped slightly from last year to about 22.2 percent, while the vacancy rates in suburban (non-CBD) districts rose to approximately 16.9 percent. But it could be worse.

Northern New Jersey and Westchester's vacancy rates still dwell far below those in the Boston suburbs, which towers at approximately 27 percent or the San Francisco suburbs at more than 25 percent.