First quarter leasing steady in Midtown.

While commercial leasing activity in Manhattan's Midtown, Midtown South and Downtown districts steadied overall during the first quarter of 1993, Midtown witnessed rapid space movement, again surging ahead of the other districts, even outpacing its own leasing velocity tracked during the same period last year.

So reports Stephen B. Siegel, president of the Edward S. Gordon Company, Inc. (ESG), in the firm's monthly analysis of the Manhattan office space market.

With leasing activity aggregating nearly 3.2 million square feet, the Midtown market ended the first quarter of 1993 some 300,000 square feet ahead of last year, when at first quarter's end space movement totalled some 2.9 million square feet. Moreover, heavy activity precipitated a drop in the region's availability rate, from 18.2 percent posted a year ago, to the current rate of 16.2 percent.

While large blocks of space were added to the market, most notably the 190,000 square feet at 660 Madison Avenue (future home to Barney's), others were removed, thanks to a number of important area transactions. Among them: The New York State Housing Finance Agency committed to 100,000 square feet at 641 Lexington Avenue, and Morgan Stanley took 70,000 square feet at 1221 Avenue of the Americas. The Bank of Austria, meanwhile, leased 41,000 square feet of space at 565 Fifth Avenue, in the first major commitment to the brand new building at 46th Street.

While leasing activity Downtown lagged slightly behind that posted last year (917,000 versus 945,000 square feet), absorption improved in the region: it's currently at zero, a veritable surge from the negative 1.66 million square feet charted after first quarter 1992. The availability rate of 22.4 percent, however, remains slightly higher than Iast year's rate of 22.1 percent.

But the market remains active, and last month witnessed commitments from DH Blair, taking 47,000 square feet at 44 Wall Street, and several leases at 2 World Financial Center totalling 37,000 square feet.

Midtown South, currently the least active of Manhattan's major office markets, is nevertheless stable, with first quarter leasing activity, 330,000 square feet, edging out last year's first quarter total of 290,000 square feet.

Further stabilizing the market is the paucity of space being returned to the market. Thanks to that, first quarter's net absorption, while charted at 128,000 square feet, compares favorably with last year's first quarter absorption of negative 262,000 square feet.