Vacancy rates drop as rental rates remain stable.

The Manhattan commercial real estate market has started down the road to recovery, and stabilization may be closer than we think, according to Newmark & Company Real Estate Inc.'s February 1994 Office Market Report.

Rental rates have reached a stand-still and vacancy rates are down compared to those charted at year-end 1993 and January 1994. "If February's numbers are an indication of what the rest of 1994 will look like, the New York real estate market is in for a sustained period of recovery," said Batty Gosin, Newmark's Chief Executive Officer.

According to Newmark's February Office Market Report, the overall vacancy rate for the Manhattan market stands at 16.87 percent compared with the 17.33 percent charted for January of 1994. Average asking rents are charted at $29.44 per square foot, a 0.49 percent decline from the $29.58 rate charted for last month

In Midtown, the Plaza District (from Third to Fifth Avenues, and from 42nd to 57th Streets) once again commanded the highest asking rent in the Manhattan market - $36.79 per square foot. This is a 4.32 percent decline over last month. Vacancy rates for "Class A - space in the Plaza District, stable at 15 percent for the past three years, declined to 14 percent in February.

"Class B" space in the Midtown West District (from Sixth to Eighth Avenues, and from 42nd to 57th Streets), experienced the most substantial decline in vacancy rate, jumping from a 12.7 percent vacancy rate last month to a 10.93 percent vacancy rate for February. Average asking rent in the Midtown West District for February was charted at $34.35 per square foot, an increase of 2.83 percent compared with the average asking rent charted for January.

The Grand Central District (from Third to Fifth Avenues, and from 40th to 49th Streets), also fared well in February. Average asking rent, charted at $32.07 in January, increased to $32.12 in February. Vacancy rates declined over 2.7 percent from 17.05 percent charted in January to 16.59 percent charted for February.

Average asking rent in the SoHo/-Lower Broadway District (from West Broadway to Lafayette Streets, and from Canal to 9th Streets), which includes only "Class B" space, experienced a 8.31 percent decline in vacancy rates and a 3.09 percent decline in average asking rents.

Vacancy rates once again remained highest in the Wall Street/Financial District, although February's vacancy rate of 20.77 percent represents a 1.19 percent decline over the 21.02 percent charted for January.

Asking rental rates in the Wall Street/Financial District for "Class A" space remained relatively unchanged, charting a 0.06 percent decline since the end of January.

Within the Midtown South District (from Park to Sixth Avenue, and from 20th to 31st Street) "Class A" space continued to experience a decrease in available space, from a vacancy rate of 12.03 percent in January to February's 11.37 percent vacancy rate

"According to February's market report, the New York real estate market is one step closer to stabilization and rejuvenation," Gosin said. "There are an abundance of opportunities available throughout the Manhattan office market and, with the support of the economy and steady and strong leasing activity, the New York market will continue to make significant strides on the road to recovery."