Avison Young Anticipates a Rebound for Manhattan Real Estate in Late 2012
- Jul 06, 2012
As the second quarter of 2012 drew to a close, the Manhattan office market showed mixed indicators. Despite some increase in new leasing activity as compared to the record lows seen during the first quarter, vacancy rates continued to rise, which led to a high level of unoccupied inventory.
The overall office vacancy rate at the end of the second quarter was 10.8 percent, this compared to 10.4 percent at the close of the first quarter and 11.3 percent at mid-year 2011.
Class A downtown vacancy climbed 2 percent from the first quarter of 2012, but this increase was mostly due to the addition of more than 500,000 square feet of space at Four World Trade Center. Downtown Manhattan vacancy rates are expected to continue to rise in late 2013 when more office space at the World Financial Center comes to market.
The leasing activity indicators are expected to reach even lower levels during the summer months, which are known to be rather dormant for the real estate industry. However, once all uncertainty arising from the presidential election this fall passes and the European debt crisis gets on track to stabilization, the market could see a significant rebound in new leases, said James Delmonte, Avison Young principal and vice president of research in New York City.
Avison Young experts anticipate that a recovery for the Manhattan real estate market is likely to begin in mid-to-late 2013, when steadier job growth is expected. With new construction being completed over the next couple of years, mid-to-late 2014 could bring an increase in rental rates and longer-term rents. Currently, 30 percent of tenants in the Manhattan office market have lease expirations between 2014 and 2017.
Canada-based Avison Young is a privately-owned commercial real estate services and brokerage company. Earlier this year, Avison Young opened its first office in New York City and started putting together a team of top industry professionals to continue the company’s aggressive expansion in Manhattan. Avison Young’s latest additions are real estate research and marketing veterans James Delmonte and Elliot Baum.
James Delmonte will oversee all aspects of Avison Young’s market research in the Tri-State area. Prior to joining Avison Young, James Delmonte acted as vice president of research with Jones Lang LaSalle in New York.
With more than 20 years of creative marketing experience, Elliot Baum will be responsible for directing Avison Young’s marketing, public relations and branding efforts throughout the Tri-State region. He was previously senior managing director of the Consulting Group and head of marketing for the Tri-State region at Colliers International.
For more market data from New York, click here.