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Downtown availability stable in 1991.

Downtown availability stable in 1991

The Downtown office market presented hope with the positive net absorption of 143,000 square feet in the fourth quarter of 1991, according to The Williams Report, released by Williams Real Estate Co. Inc.

Although a total of 766,000 square feet of tenancies were lost in 1991, negative absorptions lowed significantly compared with 1990, when 2.5 million square feet were lost.

The availability rate, which was 20.95 percent in the fourth quarter, remained fairly steady at about 21 percent throughout 1991 - in marked contrast to 1990, when availabilities rose nearly 3 percent, from 17.77 percent to 20.17 percent.

Postwar properties built in 1946-68 were hardest hit in 1991, as their availabilities soared 13.5 percent from 3.43 million to 3.89 million square feet. This sector ended 1991 with an availability rate of 25.64 percent, noted The Williams Report.

In the prewar sector, availabilities increased during the year by 9.7 percent, from 7.1 million to 7.4 million square feet. Among post-1968 properties, which constitute 44.8 percent of Downtown's available space, availabilities dropped slightly during 1991, with 19.22 percent of inventory available in the fourth quarter.

Paradoxically, the 1946-68 sector - the weakest Downtown submarket in 1991 - had the smallest reduction in asking rentals. The average asking rental of $28.41 per square foot in the fourth quarter is only $1 per square foot below average asking rentals of four years ago.

The biggest drop in asking rentals was in the post-1968 sector, where they fell 9.4 percent from $35.37 to $33.35 per square foot. Prewar properties experienced the same percentage drop, nearly all of which occurred in the fourth quarter, which ended with an asking rental of $20.84 per square foot.

"The balance of direct lease and sublease availabilities shifted dramatically during 1991," according to Michael T. Cohen, executive vice president of the New York-based commercial brokerage, management and consulting firm. "The sublease sector declined steadily throuhout the year, from a high of 21.03 percent of the total at the start of the year to 14.13 percent in the fourth quarter. This represented a drop in sublease availabilities from 3.3 million to 2.9 million square feet, while space for direct lease rose from 17.3 million to 17.6 million square feet."

The Downtown market's largest leases of 1991 include Credit Suisse for 147,193 square feet at 1 Liberty Plaza; Spear, Leeds & Kellogg for 145,000 square feet at 111-115 Broadway; The City of New York for 128,125 square feet at 40 Rector Street; and the New York Association for New Americans for 126,000 square feet at 17 Battery Place.
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Title Annotation:Manhattan office market
Publication:Real Estate Weekly
Date:Feb 5, 1992
Words:457
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