Categorized | Investing

Office Rent Prices on the Rise in Manhattan

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The office rental market is on the rise once again in Manhattan. Rent prices for office spaces increased to nearly fifty-nine dollars per square foot during the month of March. Rent prices have increased by nearly eight percent over the last year.


The southern end of Midtown Manhattan posted the largest increase in rental prices. Prices in that submarket increased by nearly six percent during the first quarter of 2012.


While the rental market in Manhattan saw strong price increases during the first quarter, the leasing market for offices in the city has slowed down slightly. The leasing market posted its strongest year since 2000 last year, though there was a substantial slowdown during the fourth quarter. That slowdown continued into the first quarter of 2012, as just under six million square feet of office property was leased.


The southern sector of Midtown posted a vacancy rate of just under six percent. That number is an improvement over the six and a half percent vacancy rate from last quarter. It is also the best in Manhattan, where the overall average vacancy rate is just over nine percent.


The southern section of Midtown is likely experiencing incredible growth because it has become the home of many media and technology companies. It is the growth of those companies that has helped Manhattan rebound from the depressed market that resulted from the recession.


While New York was once known as the financial capital, it is quickly diversifying itself, as technology and media companies make it their home. As those companies continue to grow, rental prices will likely continue to improve.


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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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