CBRE reports good news for Midtown.

Relying exclusively on small and mid-size transactions (less than 100,000 s/f), the midtown and midtown south office markets produced 1.09 million and 500,000 s/f of new leasing transactions, respectively, in November, according to MarketView, the monthly market analysis reports published by CB Richard Ellis.

Midtown south's activity level was 13% greater than the five-year average of 441,000 s/f per month, while midtown's November activity level was just 8% less than the five-year average of 1.18 million s/f. Downtown, however, continued to languish, producing just 226,000 s/ f, its lowest monthly leasing total since March, a number 55% smaller than the five-year monthly average of 507,000 s/f..

Asking rents continued to show the stability they have exhibited in the second half of this year. In midtown, the average has increased $0.32 per s/f since June.

While downtown and midtown south registered decreases during this period, they were only $0.20 and $0.15 per s/f, respectively.

Midtown south continued to show evidence of an impending turnaround, with year-to-date leasing running 27% ahead of last year's pace, 246,000 s/f of positive net absorption through the first 11 months and asking rents 7% higher in the past 12 months.

Midtown south's availability rate, currently at 12.8%--the lowest of Manhattan's three office markets --has decreased 0.7 percentage points since November 2002.

Midtown's availability rate rose 0.1 point in November to 13.6%, its highest level since 1994. Downtown's availability rate increased 0.4 point for the month to 15.6%. Midtown south's 12.8% availability rate represented a 0.2-point monthly drop.

With four units larger than lOGO00 s/f returning to the market in November, midtown posted 181,000 s/f of negative net absorption for the month. Downtown had 331,000 s/f of negative net absorption. On the other hand, midtown south had 151,000 s/f of positive absorption for the month.

Large blocks of available space remained plentiful at the end of October, with eight contiguous units larger than 250,000 s/f available in midtown, six in downtown, and three in midtown south. Contiguous blocks of 100,000 s/f to 250,000 s/f were even more numerous, with 57 available throughout Manhattan.

In November, new leases were negotiated at 88% of asking rents in midtown, up from 86% in October; 81% in downtown, up from 78%; and 84% in midtown south, up from 83%.

In the past six months, tenant improvement allowances for raw space have averaged $46 per s/f in midtown, $32 per s/f in downtown and $29 per s/f in midtown south.

For the month of December, midtown recorded 1.09 million s/f of new leasing, 16% more than October's 939,000 s/f, but 8% off the five-year average monthly figure of 1.18 million s/f.

The month's largest new lease was the U.S. General Services Administration's 77,000 s/f commitment at 140 E. 45th St. Large renewals continue to run strong, with New York Presbyterian Hospital renewing its 211,000 s/f lease at 333 E. 38th St. and CBS renewing for 184,000 s/f at 555 W. 57th St.

For the first 11 months of 2003, leasing activity in midtown totaled 10.10 million s/f--12% ahead of last year's pace to date, and already surpassing the entire total for 2002 (9.56 million s/f).

The strong leasing activity was not enough to offset the return of space to the market, resulting in 181,000 s/f of negative net absorption in November. Four large units became available during the month: 222,000 s/f of former Clifford Chance space at 200 Park Ave. offered for sublease by Deutsche Bank; 154,000 s/f at 1155 Ave. of the Americas; 143,000 s/f offered for sublease by UBS Financial Services at 51 W. 52nd St.; and 110,000 s/f at 630 Fifth Ave. And the year-to-date total of 5.33 million s/f is 26% greater than the negative 4.22 million s/f tallied in the same period of 2002. Available space totaled 26.25 million s/f at the end of November. Availability has increased by 5.51 million s/ f since the beginning of the year. Sublease space represents 37% of all availability, down from 38% in October. Midtown south recorded a strong 500,000 s/f of leasing activity in November--up 10% from September's brisk 454,000 s/f and 13% ahead of the five-year monthly average. Other than two leases for 61,000 s/f--one by Mount Sinai NYU Health at 1 Park Ave. and the other a sublease by FOJP Service Corporation at 63 Madison Ave.--all new leases in November were of units smaller than 25,000 s/ f. Thomas Publishing Company renewed for 112,000 s/f at 5 Penn Plaza. Thus far in 2003, leasing activity has out paced 2002's performance by 27%--4.39 million s/f this year vs. 3.47 million s/f for the same period in 2002. Net absorption was positive 151,000 s/f in November, boosting the total for the first 10 months of this year to positive 246,000 s/f. This is a dramatic improvement from 2002, when midtown south endured 2.1 million s/f of negative absorption through November.