Office Space in NYC
Hits Record High
by Ray A. Smith
From The Wall Street Journal Online
January 14, 2004
The average price for a high-quality office building in Manhattan hit a record $410 a square foot in 2003, even as the vacancy rate rose and rents fell, according to a new report by New York-based commercial real-estate services firm GVA Williams. That was up substantially from an average $306 a square foot in 2002.
The average price nationwide for a high-quality office building, or so-called Class A space, in a central business district rose to about $293 a square foot in 2003 from $252 a year earlier, according to Real Capital Analytics Inc., a New York-based real-estate research firm.
Meantime, the vacancy rate for Class A office space in Manhattan rose to 11.3% at the end of 2003 from 10.7% at the end of 2002, according to Colliers ABR Inc., a New York-based commercial real-estate services firm. Average asking rents for such space fell to $45.59 a square foot in 2003 from $47.52 in 2002.
James Murphy, executive managing director at GVA Williams, says the record price indicates "investors are positive and optimistic about New York City and are aggressively acquiring properties" in anticipation of a rebound in leasing activity.
Though the dollar volume of Manhattan Class A building transactions fell to $8.75 billion last year from a record $10.9 billion in 2001, says Bill Shanahan, executive vice president in the New York office of Los Angeles-based real-estate services firm CB Richard Ellis, some huge deals influenced the square-foot average.
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