Midtown Manhattan Office Lease Trends July 2011
Trends in real estate markets, including the Manhattan office lease market, tend to lag behind other economic trends by several months. Consequently, asking rents increased and vacancies decreased for Class A office space in Midtown Manhattan during the Second Quarter of 2011, despite the sluggish economy. Although rents are creeping upward, they are still well below the recent peak levels reached in 2007.
Our landlord clients seem optimistic about the future, and during recent transactions have offered tenants fewer rent concessions and were less willing to negotiate other tenant incentives. We have also experienced this trend in our recent lease negotiations representing tenants. In some instances, landlords have denied our requests for future renewal options and have held firm on asking rents despite the possibility of losing an existing long-term tenant. Nonetheless, due in part to the unemployment rate remaining high and other economic uncertainty, there still seems to be many lease and sublease bargains available for tenants in Midtown Manhattan and its submarkets in slightly less desirable locations, particularly for short lease terms.
If you would like to know more about this posting please contact Stephen M. Lasser of Barton Barton & Plotkin LLP for additional information.