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Lower Manhattan Shattered Records In Q1

Tristan Ashby Ashby: “In a reversal from this past year, Downtown led activity with five of the largest leases of the quarter.”

NEW YORK CITY—So far in 2017, Lower Manhattan is crushing it.

The submarket recorded more than 2.3 million square feet in leasing transactions in the first quarter of 2017, according to a new report by JLL. More transactions were completed Downtown in the first quarter of the year than in any quarter during the past two years. Additionally, deal volume was 44% higher than the quarterly average the submarket has posted since 2007.

“In a reversal from this past year, Downtown led activity with five of the largest leases of the quarter, including Spotify’s relocation,” says Tristan Ashby, VP and director of New York research. “Newer, high-quality space west of Broadway and good-value space to the east drove activity in Lower Manhattan. Leasing activity increased throughout New York City following the Presidential election and remained strong through the first two months of the year. Deal volume was slower in March but leases are still filtering through.”

Five of Manhattan’s top 10 leases for the quarter took place Downtown, including the largest new deal of the quarter—Spotify’s relocation to 4 World Trade Center. The other four large deals completed in Lower Manhattan in the first quarter of 2017 include the Royal Bank of Canada renewing 402,000 square feet at 200 Vesey St., the New York State Attorney General’s office leasing 345,000 square feet at 28 Liberty St., Aon taking 203,000 square feet at 1 Liberty Plaza and Tullett Prebon signing for 128,000 square feet at 200 Vesey St.

Downtown’s overall vacancy rate dropped to 10.4% this quarter, a decrease of 10.3% (or 90 basis points) from 11.6% in the fourth quarter of 2016. Year over year, the submarket’s overall vacancy rate fell 6.3 % (or 70 basis points) from 11.1% in the first quarter of 2016. The Class A vacancy rate dropped to 9.7 % in the first quarter of the year, a decrease of 17.8% (or 190 basis points) from 11.8 % the previous quarter. Year over year, Downtown’s Class A vacancy rate dropped 15.7 % (or 180 basis points) from 11.5 % in the first quarter of the year.

Overall average asking rents in Lower Manhattan fell to $56.45 per square foot this quarter, a decrease of 2.1% from $57.67 per square foot in the fourth quarter of 2016. Year over year, the submarket’s overall rates dropped 2.2% from $57.73 per square foot in the first quarter of 2016. Class A average asking rents fell to $60.79 per square foot in the first quarter of the year, a decrease of 3% from $62.68 per square foot the previous quarter. Year over year, Downtown’s Class A rates fell 3.1% from $62.72 per square foot in the first quarter of 2016.

 

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