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Office leasing sees across-the-board improvement

By Dan Orlando

Peter Turchin
Peter Turchin

For the first time since 2000, all major leasing indicators in Manhattan markets improved during the second quarter.

In conjuncture with improved absorption rates, Midtown’s leasing activity rose from 8.63 million square feet to 7.37 million square feet since the same time last year; Midtown South saw a jump as well, from 2.10 million to 3.41 million. Downtown Manhattan climbed from 2.46 million square feet to 3.52 million sq. ft.

Average rents escalated, reaching $73.82 psf from $69.51 in Midtown and $66.86 psf from $63.44 in Midtown South. Downtown saw a nearly $2 psf climb from the year’s opening quarter and notched $49.04.

“Although there has long been an impression that the Manhattan office market is a ‘zero sum game market (where) one market benefits at the expense of another market — that’s not true today,” said Peter Turchin, vice chairman of CBRE.

“If leasing activity maintains the pace of the first six months for the rest of the year we will set a record for Manhattan.”

CBRE also addressed their “Workplace 360” initiative during and discussed how current workplace practices lead to staff spending less than half of their day confined to their desks.

“One of the interesting facts we have found in studying workplace strategies is that over the years office space has remained generally flat, which is counter-intuitive to the idea that businesses are placing more and more people in less space,” said Lenny Beaudoin, senior managing director, Workplace Strategy, CBRE.

“Following the recent financial crisis, we appear to be at an inflection point where top-line performance, speed and employee workplace satisfaction, rather than bottom-line cost reduction, are the goals of business.”

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