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Leasing activity steady in February.

Commercial leasing activity in Manhattan's Midtwon, Midtown South and Downtown districts steadied during the month ending March 1, but absorption levels and leasing velocity continued, for the most part, to show signs of improvement.

So reports Stephen B. Siegel, president of the Edward S. Gordon Company, Inc. [ESG] in the firm's February analysis of the Manhanttan of office space market.

With over 1 million square feet of space leased during the month, the Midtown District's availability rate dropped to 16.2 percent in February as asking rents held steady at $32.25 a foot. A year ago, the district's availability rate was 18.1 percent.

The most active market segment in Midtown was the Penn/garment submarket where 300,000 square feet was leased. In the largest transaction in that area, the New York State Department of Health leased an additional 26,350 square feet at 5 Penn Plaza. Major transactions in Midtown included Lifetime Television's 76,000-squarefoot lease at 825 Eighth Avenue; Republic National Bank's lease of 45,000 square feet at 10 East 40th Street, and Sithe Energy's lease of 27,000 square feet at 450 Lexington Avenue.

While leasing activity in downtown Manhattan in February 'totalled just 237,000 square feet -- about the same as in January -- the good news is that vacant space, particularly in the Financial District, is slowly being absorbed. For the first two months of the year, more space -- about 217,000 square feet .- was leased than was put back on the market. Last year, the reverse was true as net absorption figures were negative by a whopping 476,006 square feet.

Among the larger Downtown leasing transactions during the period was Sanwa Bank signing on for 40,000 square feet at 32 Old Slip; Patriot Securities leasing 15,000 square feet at the same address; and American Marine Insurance taking 29,000 square feet at 90 Washington Street.

Interestingly, the district's biggest news, the tragic explosion at the World Trade Center, is expected to have little impact on the space market. According to Siegel, a large number of short-term deals were made to help Trade Center companies that were temporarily displaced, but the long range implications of these transactions appear to be minimal at best.

While the Midtown South area continues its struggle to hold its own against competition from the more established Midtown and Downtown office districts, conditions in this marketplace do appear to be slowly improving.

Leasing activity totalled 64,000 square feet in February following an impressive 184,000 square feet in activity charted in January. Year-todate leasing totals point to a healthier marketplace -- 250,000 square feet leased thus far in 1993 compared to 130,000 square feet in activity charted during the first two months last year.
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Title Annotation:1993 statistics for Manhattan, New York, New York office space
Publication:Real Estate Weekly
Date:Mar 31, 1993
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