Manhattan office leasing levels improved in February, led by a 45 percent increase in activity in the downtown area compared to January, according to CB Richard Ellis' latest Manhattan Marketview Snapshot.
Overall office leasing activity in Manhattan was up 19 percent in February from a year earlier. A total of 1.74 million square feet was leased in February compared to 1.59 million square feet in January 2013, CBRE reports.
The bulk of the increase was downtown, where 580,000 square feet of space was leased in February, topping the five-year monthly average of 340,000 square feet by more than 70 percent, according to CBRE's report. During the first two months of 2013, downtown leasing activity nearly doubled the pace set during the same period last year.
February's leasing activity offset the newly-available space brought to the market, fueling positive absorption and a 20 basis point drop in the availability rate in downtown, CBRE reports.
Manhattan's overall availability rate rose 20 basis points during February to 12.5 percent, according to CBRE. Manhattan's overall average asking rate rose $1.12 or 2 percent to $60.56 per square foot in February. By comparison, the average asking rate in February 2012 was $54.40 per square foot.
In midtown, leasing totaled 830,000 square feet in February, falling short of the five-year monthly average of 1.14 million square feet by 27 percent, according to CBRE. This was the second consecutive month of below-average leasing in Midtown. During January and February, leasing was about equal to 2012 levels.
With little new space added in midtown and below-average levels of leasing, as of the end of February, there was 1.32 million square feet of negative absorption in midtown, according to CBRE. This compares to the same period in 2012 when there was 1.59 million square feet of negative absorption.
For the first two months of 2013, the availability rate in midtown rose 30 basis points to 12.6 percent, its highest since November, 2010, while the sublease availability rate rose to the three percent mark for the first time since December, 2010.
In midtown south, leasing activity was on par with the five-year monthly average of 330,000 square feet, after three consecutive months of below-average leasing, according to CBRE. Year-to-date leasing lagged January and February 2012 by 15 percent. Several large blocks of space were brought to market during February, driving negative absorption and a 40 basis point increase in the availability rate. The average asking rent went down by $.50 per square foot, during February, because of new space on the market priced below the market average.