New York Market Overview

Companies are looking in more trendier neighborhoods downtown or downsizing which is leaving the Plaza office market with high vacancy. Available space in the Plaza market (between Sixth Avenue and the East River between 47th and 65th streets) seems to have reached a two year high to 12.3% from 10.5% compared to last year.

The Plaza office market is struggling. Financial firms which occupy roughly 30 percent of the district’s offices are tightening their belts, seeking lower rents, and moving into smaller spaces. Still others are seeking cooler addresses south of Midtown, leaving hundreds of thousands of pricey square feet vacant.

Due to the reduction in office rents following the real estate crash, the price of leasing a Manhattan office has not kept pace with inflation. The average Manhattan office rent in 2012 is $55 per square-foot, up 22 percent from 2002, when the average rent was $45 per foot. However, had lease prices kept pace with inflation, they would be averaging approximately $60 per foot this year.

The average price for a Manhattan office building hit $661 a square foot in the first half of 2012, up 33 percent year-over-year.