By Konrad Putzier
By at least one measure, Downtown’s office market is the hottest in the city.
A total of 1.433 million square feet of downtown space had its asking rent re-priced upwards in the first quarter, according to CBRE data — around 50 percent more than in Midtown and Midtown South taken together.
Re-pricing, or revising the asking rent up or down after the initial listing, is a useful measure of how quickly a market is growing. Other, more common measures such as average rents and vacancy rates are often distorted on a quarterly basis due to large blocks of office space hitting the market.
While Midtown South had the largest year-over-year growth in asking rents and leasing activity, it clearly lagged behind Downtown in terms of re-pricing. 1.433 million s/f, or 11.7 percent of all listed space, was re-priced upwards in Downtown. In Midtown South, 478,219 s/f or 6.9 percent of all listed space was re-priced upwards. For Midtown these figures were even lower at 436,309 s/f, a meager 1.7 percent of all listed space there.
Downtown also had the smallest share of space re-priced downwards. Only five percent of all re-priced space downtown was adjusted downwards in the first quarter, compared to 22 percent in Midtown South and 46 percent in Midtown.
CBRE included re-pricing in its quarterly report for the first time, and couldn’t comment on how these figures compare to past quarters or years.
But CBRE’s Peter Turchin, who specializes in owner representation, said that Downtown re-pricing in the first quarter clearly exceeded the average of the past years. He added that high absorption rates indicate many tenants have accepted the revised pricing.