Manhattan office space vacancy increases: Study
There's a lot of room for offices to set up shop in Manhattan.
A report issued Tuesday by the real estate group Cushman & Wakefield found the vacancy rate for the borough's office market increased 0.6% during the summer to 9.6%.
The increase is the biggest jump in vacancy since 2009, and the firm's analysts say it is due to the change in attitude as financial services and other industries wait and see how the economy progresses.
"Some businesses are under pressure and reducing their employment, and when that happens they put their space on the market," Ken McCarthy, Cushman & Wakefield's senior economist said.
The report noted that midtown had the highest vacancy rate at 10.5%.
McCarthy said the increase isn't a sign of problems for the market since Manhattan ranks second to San Francisco as the city with the lowest office vacancy rate.
Despite the loss of office space, some companies did make some major purchases during the year, including Whole Foods, which bought a 40,000-square-foot location on the Upper East Side, and Brooks Brothers, which bought a 4,500-square-foot space on the West Side.
"New York is still one of the healthiest markets in the country," McCarthy said. "Things are not falling apart at all."
High rents and cost cutting by companies have led to an increase in Manhattan office space vacancy, according to Cushman & Wakefield. Here is the breakdown:
Midtown: Average office vacancy rate: 10.5% Average rent per square foot: $66.49
Midtown south: Average office vacancy rate: 9.3% Average rent per square foot: $49.12
Downtown: Average office vacancy rate: 6.6% Average rent per square foot: $39.83