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Manhattan office leasing ahead of '92.

Building on year-end 1992 momentum, commercial leasing activity during the first month of 1993 was strong throughout Manhattan, further fortifying optimists' predictions of a turnaround.

Space movement in all three districts - Midtown, Midtown South and Downtown -- during the period ending Feb. 1 was encouragingly ahead of activity tracked during the same period last year.

So reports Stephen B. Siegel, president of the Edward S. Gordon Company, Inc. (ESG) in the firm's January analysis of the Manhattan space market.

With leasing activity aggregating some one million square feet of space in January, Midtown retained its lead over the other districts, while dropping its own availability rate from 16.5 percent last month to 16.3 per.cent. That rate is even more promising when compared to the 17.7 percent availability rate the district posted one year ago.

Most of the Midtown movement occurred in the Grand Central region, and at the Daily News Building in particular, where transactions by the Daily News resulted in the removal of 115,000 square feet of space, and the addition of 55,000 square feet of space to the market.

In Midtown South, commercial leasing in January totalled a 184,000 square feet of space, a robust increase over the 75,000 square feet leased during the same period last year. Precipitating the upswing were commitments by Transit Insurance company for 40,000 square feet of space at 275 Seventh Avenue, and NRS Publishing for 16,000 square feet of space at 111 Fifth Avenue.

Tempering optimism, however, was the addition of some 65,000 square feet of space to this market, due in part to the Department of Environmental Protextion, which vacated space at 295 Lafayette Street, and CRC Information Systems, which withdrew from space at 435 Hudson street. This activity created a slight increase in the area's availability rate, from 18.0 percent to 18.1 percent, and helped precipitate the continued slide of rental rates, from last year's $17.25 per square foot, to the current rate of $15.65 per square foot.

January's activity bodes well for the overall health of the Downtown market. Leasing activity, aggregating nearly 290,000 square feet of space, represented an improvement over the 235,000 square feet leases last year at this time.

Moreover, activity was fairly evenly distributed among the district's market segments. In the Financial District, leases were penned for some 100,000 square feet of space, some 40,000 square feet representing McGraw-Hill Financial Service's commitment to 25 Broadway. The World Financial Center' s Tower 2, meanwhile, witnessed nearly 100,000 square feet of space. movement, primarily from Oppenheimer Capital, Fuji Securities, and Farr Man & Company, Inc.

Most promising, however, were absorption figures, which, when compared with 1992 figures, revealed an enormous upswing in the Downtown market's health. In January 1992, a huge negative absorption was charted; nearly 860,000 square feet of space was added to the market (over and above that which was leased). Last month, conversely, the region posted a positive absorption of 240,000 square feet of space.
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Title Annotation:New York, New York commercial leasing activity increases in January 1993 compared with figures from 1992
Publication:Real Estate Weekly
Date:Feb 24, 1993
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