Jones Lang LaSalle reports $20 psf leap in rents in 12 months.Jones Lang LaSalle Jones Lang LaSalle (NYSE: JLL) is a major real estate and money management services firm headquartered in the Aon Center in Chicago, Illinois and the only company in its industry making it into Fortune magazine's list of the 100 Best Places to Work in the U.S. announced that average asking rental rates for high-quality office space in Midtown mid·town n. A central portion of a city, between uptown and downtown. midtown Noun US & Canad the centre of a town Manhattan have jumped by $20 per square foot in the past year. Tenants clamoring clam·or n. 1. A loud outcry; a hubbub. 2. A vehement expression of discontent or protest: a clamor in the press for pollution control. 3. A loud sustained noise. for space fueled a 34.6% jump in Midtown Class A rents in the fourth quarter of 2006, leaping to $78.62 psf from $58.41 psf in the fourth quarter of 2005. "Owners with trophy assets throughout Midtown are now achieving rents in excess of $100 per square foot on average," said James Delmonte, director of research with Jones Lang LaSalle's New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of office. "Penthouse penthouse Enclosed area on top of a building. A penthouse can be an apartment on the roof or top floor of a building or a structure on the roof housing the top of an elevator shaft, air-conditioning equipment, or stairs leading to the roof. and other top-flight spaces are leasing out at rates of $125 per square foot or more." Overall, Midtown saw average asking rental rates rise by 24% in the final quarter of 2006, reaching $61.31 psf from $49.44 psf at year-end 2005. Rent growth was somewhat more moderate in the Class B sector, which recorded a 14.7% increase in rates in the fourth quarter of 2006. Midtown South buildings also reaped the benefits of an active leasing market. Average asking rental rates for Midtown South Class A office space surged by 30.3% in the past year, rising to $45.55 psf in the fourth quarter of 2006 from $34.95 psf at year-end 2005. Although all of Lower Manhattan Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the City of New York. Lower Manhattan is generally defined as the area delineated on the north by Chambers Street, on the west by the Hudson River (North experienced substantial growth in average asking rental rates during the past year, the Class B market recorded an impressive 27.2% increase. Downtown Class B rents grew to $36 psf in the fourth quarter of 2006 from $28.31 psf in the fourth quarter of 2005. The solid performance of the Class B market lifted overall rental rates by 18.8% at year-end 2006, increasing to $41.71 from $35.10 psf at year-end 2005. Rents for Class A space in Lower Manhattan were driven up by 17.3% during the same time period, rising to $46.20 psf from $39.38 psf. Vacancy rates in Midtown office buildings hovered around 6% in the final quarter of the year, with lesser-quality product posting a strong performance. The submarket's Class B vacancy rate slid 12.9% in the fourth quarter of 2006, slipping to 6 % from 6.8% at year-end 2005. The submarket sub·mar·ket n. A geographic, economic, or specialized subdivision of a market. adj. Being below what is usual in a particular market: submarket wages; submarket interest rates. saw its overall vacancy rate increase by 2.4% in the fourth quarter of 2006, inching up to 6.3% from 6.2% in the fourth quarter of 2005. "Midtown's Class B buildings are experiencing a surge in interest caused by the ongoing strength of the area's Class A product," said Delmonte. "Tenants are pioneering a move into the submarket's outlying out·ly·ing adj. Relatively distant or remote from a center or middle: outlying regions. outlying Adjective far away from the main area Adj. 1. sectors and lesser quality buildings as Midtown rents continue to escalate es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. ." Despite the predictions of market watchers, Lower Manhattan's vacancy rate did not descend de·scend v. de·scend·ed, de·scend·ing, de·scends v.intr. 1. To move from a higher to a lower place; come or go down. 2. below 10% in 2006. The submarket's office inventory was boosted when 7 World Trade Center's 1.7 million square feet of Class A space was added to the market. The extra space pushed up Downtown's Class A vacancy rate by 19.2% in the fourth quarter of 2006, rising to 10.4% from 8.7% in the fourth quarter of 2005. Silverstein Properties Inc. priced 7 World Trade Center above the market, causing average asking rents to rise despite an increase in vacant space Downtown. On the other hand, Lower Manhattan's Class B market continued to improve, posting a 16.5% decrease in its vacancy rate at year-end 2006, dropping to 11.2% from 13.4% in the fourth quarter of 2005. The positive movement of the Class B market kept Downtown's overall vacancy rate increase to just under 4%. |
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