Tenants take it to the max in search for high-end space.Cushman & Wakefield released year-end statistics for the Manhattan commercial real estate market that show strong demand for the city's most expensive office space and declining vacancy rates throughout the borough.
In 2005, Cushman & Wakefield tracked more than 78 completed office leases with rents above $70 per square foot, compared to 48 in 2004 and just eight in 2003. The $70 figure is representative of the higher end Coordinates:
For other places with the same name, see Billinge.
Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of the market, well above the average asking rent of $53 per square foot registered at yearend for New York's most modern and best located office buildings in Midtown mid·town
A central portion of a city, between uptown and downtown.
US & Canad the centre of a town .
Throughout the city, the vacancy rate fell to four year lows as more than 10 million square feet of available space was removed from the market. The Midtown vacancy rate declined to 7.8 percent, its lowest level since the third quarter of 2001; Midtown South's vacancy declined to. 7.4 percent, its lowest point since the second quarter of 2001; Downtown's vacancy declined to 10.6 percent, its lowest level since the fourth quarter of 2001.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Joe Harbert, Cushman & Wakefield's chief operating officer Chief Operating Officer (COO)
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. for the New York Metro For the region, see .
Metro New York is a free daily newspaper in New York City started in 2004. Its main competition is AM New York, with which it practices many of the same distribution and marketing strategies. Region, "An increase in pricing for the high-end space in the market illustrates the strength of the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page. sector in the economy. The most expensive office space, located for the most part on Fifth Avenue, Madison Avenue Madison Avenue, celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S. and Park Avenue, has been leased primarily by financial services, hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" and real estate investment firms. Those are the types of tenants who are growing and competing for this type of space."
Mr. Harbert said that financial services firms remained the most active industry in 2005, leasing more than 4.2 million square feet of office space on deals above 10,000 square feet, followed by law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:
Among the top leasing deals of 2005 were Citigroup at 485 Lexington Ave., 787 Seventh Ave. and 731 Lexington (750,000 square feet), Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. at 50 Rockefeller Plaza (320,000 square feet), American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. Financial Advisors at Three World Financial Center (220,000 square feet), law firm Fried Frank Harris Schriver & Jacobson at One New York Plaza One New York Plaza is an office building in New York City, built in 1969, and is located at the intersection of South and Whitehall Streets (). It is the southernmost of all Manhattan skyscrapers. (330,000 square feet), the law firm Ropes & Gray at 1211 Avenue of the Americas (240,000 square feet), and the law firm McDermott Will & Emery at 340 Madison Ave. (170,000 square feet).
Overall leasing activity for 2005 totaled 25.5 million square feet, down from 29.5 million square feet in 2004. According to Mr. Harbert, despite the fact that less new leasing occurred in 2005, the office market tightened due to the fact that "fewer firms gave up excess space, companies that had been marketing excess space for lease took it back off the market and a substantial amount of space was converted to residential use in Midtown South and Downtown."
The nearly $15 difference in average asking rents between Midtown and Downtown at the end of 2004 has increased to more than $17 per square foot at the end of 2005. A class-A space comparison between Midtown and Downtown reveals a $19 per square foot differential, before factoring in economic incentives for companies locating Downtown.
According to Mr. Harbert, "the latest economic incentives package approved over the summer has been making an impact lately. There were several transactions and leases out for Downtown office space at the end of the year, and Downtown saw its vacancy rate decline throughout 2005."
Mr. Harbert pointed out that three of the top 10 Manhattan office lease transactions were closed Downtown in 2005 for a total of about one million square feet. "A further tightening of the Midtown market, combined, with meaningful Downtown incentives, should reinvigorate re·in·vig·o·rate
tr.v. re·in·vig·o·rat·ed, re·in·vig·o·rat·ing, re·in·vig·o·rates
To give new life or energy to.
re Downtown Manhattan and its prospects going into 2006," Mr. Harbert said.
Preliminary estimates for the total value of Manhattan building The Manhattan Building is a 16-story building at 431 South Dearborn Street in Chicago, Illinois. It was designed by architect William Le Baron Jenney and constructed from 1889 to 1891. sales in 2005 set another record, reaching $16.8 billion at yearend. The previous record was set in 2004, when about $15.1 billion in commercial space was purchased.
The highest profile sale of the year was the $1.72 billion sale of the MetLife Building The MetLife Building, originally called the Pan Am Building, is a skyscraper located at 200 Park Avenue in New York City. History
The Pan Am Building was the largest commercial office building in the world when it opened on March 7, 1963. to Tishman Speyer Properties Tishman Speyer Properties is a leading real estate building and operating company set up in 1978 by two founding partners, Jerry Speyer and Robert Tishman. Overview . Arranged by Cushman & Wakefield'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 Capital Markets Group, it set the record for a single office building sale.
According to Mr. Harbert, "Commercial real estate investment has really only gone through two phases since the stock market crash of 2000. Initially, money flowed from stocks and bonds to office buildings that had more predictable returns--meaning buildings that were modern and fully leased for the long-term, carrying little leasing risk.
"Interest rates continued their decline to historic lows, and building prices rose to record highs, even as vacancy rates were rising," Mr. Harbert added. "The second phase started when investors, primarily private equity investors, started betting on a turnaround in leasing fundamentals. Taking advantage of low interest rates, they started buying properties that had large blocks of space available to reap the higher returns available through improved occupancy."
In 2005, more than 60 percent of transactions were completed by private equity investors taking advantage of the lower interest rate environment.
As interest rates continue to rise, institutional investors are expected to level the playing field and win their fair share of properties on the market in 2006, said Mr. Harbert.
Retail continues in an upward trend. SoHo remains the hottest retail market as far as activity. Ben Sherman Ben Sherman is a British clothing company, producing shirts, suits, shoes and other items.
Ben Sherman clothing designs sometimes feature the roundel and colours of the British Royal Air Force, often called the mod target. , Massoni and Footlocker all leased space for new locations there during the fourth quarter.
Madison Avenue saw a $6.00 bump in asking rents, with several properties drawing more than $1,000 per square foot. Retailers like Calypso Calypso, in Greek mythology
Calypso (kəlĭp`sō), nymph, daughter of Atlas, in Homer's Odyssey. She lived on the island of Ogygia and there entertained Odysseus for seven years. , which took 11,000 square feet at 815 Madison, and Pomellato, which leased space at 741 Madison, showed interest in the area, lowering the vacancy rate to 7.7 percent at yearend, from 10.5 percent at the end of the second quarter 2005.
Rents on the Upper West Side along Broadway also jumped from $242 at the end of the third quarter to $264 at yearend, due to the development of 1880 Broadway, which came to the market with asking rents ranging from $350 to $450 per square foot.
Tenants continue to show interest in Times Square, not only for the tourism and foot traffic, but also seeing the new residential development there and west of Eighth Avenue.
At the end of 2005, the level of interest for high-profile corner spaces in Manhattan by banks slowed slightly. While there remains substantial competition to lease these corner locations, the pause by the banks has been noted, and it remains to be seen if this trend will continue into 2006.
OFFICE MARKET STATISTICS BREAKDOWN MANHATTAN 4Q '05 3Q '05 4Q '04 4Q '03 Total Vacancy 8.4% 9.6% 11.0% 12.5% Sublease Vac. 1.6% 2.0% 2.5% 3.3% Overall Rent $40.58 $41.35 $39.55 $40.53 DOWNTOWN 4Q '05 3Q '05 4Q '04 4Q '03 Total Vacancy 10.6% 11.5% 13.7% 13.5% Sublease Vac. 2.1% 2.1% 2.8% 2.8% Overall Rent $30.89 $31.09 $31.55 $36.92 MT SOUTH 4Q '05 3Q '05 4Q '04 4Q '03 Total Vacancy 7.4% 8.1% 10.2% 13.3% Sublease Vac. 0.6% 0.6% 1.5% 3.2% Overall Rent $33.63 $33.58 $31.34 $30.37 MIDTOWN 4Q '05 3Q '05 4Q '04 4Q '03 Total Vacancy 7.8% 9.3% 10.1% 11.9% Sublease Vac. 1.7% 2.3% 2.6% 3.6% Overall Rent $47.41 $48.06 $45.98 $45.37