Unemployment in New York City is down and to harmonize with it’s slide, office leasing in Manhattan is humming upward, according to the Manhattan Office Market Report for the second quarter of 2015 which DTZ released Monday.
Office-using employment in the city grew by 2.5 percent over the past year with nearly 32,000 jobs materializing in NYC.
The area’s unemployment rate dropped over the past 12 months from 7.3 percent to 5.9 percent in May.
Class A space recovered all the space brought to market in the first quarter with almost 1.1 million square feet of positive absorption during second quarter 2015, bringing its year-to-date total to positive 368,000 s/f.
While Manhattan enjoyed a solid rebound quarter overall after a rocky opening to 2015, Richard Persichetti, vice president, research, marketing and consulting at DTZ said Lower Manhattan could sustain some improvement on the backend of the summer.
“I do see downtown picking it up the second half,” said Persichetti, who believes the southern portion of Manhattan can build upon the progress made between January and June.
After struggling through the first quarter of 2015, Downtown began to chip away at all of the space brought to market and posted 441,275 s/f of positive absorption during the quarter, causing availability to drop to 12.1 percent.
Despite the high numbers, Downtown only has one transaction greater than 100,000 square feet this year.
“I can’t see going another six months with only one more big deal closed downtown. So I think downtown is poised to have a stronger second half of the year,” said Persichetti. “There was a lot of space that was put on the market between now and the beginning of the year.”
The report points to the pending completion of a deal between 20th Century Fox and News Corporation, which would bring the media mega power to 2 World Trade Center and suggests that should a deal get done, interest in larger spaces may be reinvigorated.
As REW went to press, it was reported that Moody’s Investor Services would ink an 80,000 s/f lease for space at the Durst Organization’s 1 WTC.
Asking rents continued to creep up with Class A rents increasing by $0.28 per s/f to $61.89 and Class B rents rising $0.16 per s/f to $44.18.