New York had lowest vacancy rate in 2001, CoStar report says

Real Estate Weekly, March 20, 2002

New York-is proving remarkably resilient as it continues to recover from the Sept. 11 terrorist attacks. As 2001 came to a close, New York had the lowest overall vacancy rate -- 9.4% -- of any major American city, according to newly released market research from CoStar Group, Inc., the leading provider of information -- services to the U.S. commercial real estate industry.

The CoStar Office Report Year-End 2001 provides comprehensive real estate statistics on 35 markets throughout the United States including New York, NY. In addition to research on issues ranging from absorption, deliveries, vacancy and rental rates, the new report provides detailed analysis of the New York market.

While Manhattan posted a lower overall vacancy rate than the national average of 13.6%, vacancies in the city increased throughout 2001, despite the demand created by displaced World Trade Center tenants. Much of the increase was the result of a surge in sublet space as tenants dumped 8.57 million SF of office space back on the market, most of it in the third and fourth quarters. By contrast, the amount of direct vacancy increased by only 4.4 million SF during the year.

"Terror and the economy have taken a toll on the city," said Jake Adler, CoStar research manager for New York. "However, New York remains one of the strongest office markets in the United States."

The CoStar Office Report also shows that Manhattan remains the most expensive office market in the country with an average rent of $45.42 per SF. However, rental rates in New York declined in all four quarters of last year, dropping from an average of $47.35 per SF in first quarter.

Markets covered in the CoStar Office Report include Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Detroit, Houston, Indianapolis, Jacksonville, Kansas City, Long Island, Los Angeles, New Jersey, New York, Orange County, Orlando, Philadelphia, Phoenix, Pittsburgh, Raleigh/Durham, Sacramento, San Diego, San Francisco, Seattle, South Florida, St. Louis, Tampa, Washington DC, and Westchester/Southern Connecticut.