Jones Lang LaSalle


Cost of Manhattan office rent continues rise
by Julie Satow
April 04, 2006

Manhattan’s average asking rent for commercial office space in March hit $43.20 a square foot, the highest level in over three years.

Manhattan’s average asking rent for commercial office space in March hit $43.20 a square foot, the highest level in over three years, according to a first quarter market report released today by brokerage firm Cushman & Wakefield Inc.

The number of tenants who have signed leases with rents of more than $100 a square foot is also growing, according to the report. There were 15 deals in the first quarter that reached this benchmark, compared with only 10 such deals for all of 2005.

The rise in rents is attributable to the scarcity of Class A office space in Midtown and the addition of newer buildings that have high asking rents. At the renovated Verizon building at 1095 Sixth Ave., for example, the asking rents are $85 a square foot.

The completion of 7 World Trade Center has pushed up rents and vacancy rates downtown, according to the report. Average asking rents downtown rose to $35 a square foot, a $4 hike from the fourth quarter of 2005, while the vacancy rate rose to 11.6% in the first quarter from 10.6% in the previous three-month period.

Other trends noted in the report include a number of clothiers who are opening their own boutiques, including Juicy Couture and Anne Klein, and the emergence of Fifth Ave. between 42nd and 49th streets as a desirable area for retail leasing.