2q sees higher vacancy rates

Real Estate Weekly, August 28, 2002

Plymouth Partners, Ltd. reports that this year's second quarter brought continuing deterioration of Manhattan office market conditions that began 18 months ago. During the quarter, availability rates continued their rise in all three Manhattan markets: from 10.8% to 11.1% in Midtown, from 13.4% to 14.2% in Midtown South, and from 14.2% to 15.9% in the Downtown market.

James Meiskin, president of Plymouth Partners, said, "The Downtown market is the weakest in Manhattan. At year's end 2000, the Downtown market had 102.8 million SF under lease. Since then, occupancy has plunged by 23 million SF, far more than the 13.4 million SF destroyed at the World Trade Center."

According to Meiskin, "Net absorption continues negative as well in all three areas. Midtown and Midtown South each lost approximately 880,000 SF of tenancies, while Downtown's loss totaled those two combined -- 1.76 million SF."

The Plymouth Partners' research reports 52.8 million SF available in Manhattan's three main business districts, or 13.2% of total inventory.

For the first time since the start of the current slump, more space entered the marketplace during the second quarter for direct lease than for sublease. Direct lease availabilities increased 2.5 million SF, to 34 million, while sublease space increased by 0.7 million SF to 18.8 million.