Lower Manhattan Office Rental Rates in Q3 2014

Lower Manhattan Office Rental Rates in Q3 2014 increased modestly over the prior quarter. In Q3 the average quoted rent (across Class A, B & C buildings) was $46.11 PSF, up 1.58 % over $45.39 in Q2. The Lower Manhattan sub-market includes the Insurance and Financial Districts as well as City Hall and Tribeca. It had a 10.8% vacancy rate spread over 509 buildings with 121,940,664,997,436 square feet of space. (Information provided by Costar.)

 

Demand for Lower Manhattan office space is exceedingly strong for a number or reasons: (1) Rents are lower than comparable quality midtown buildings; (2) Many Landlords are providing generous Tenant Incentives including “build-to-suit” programs; (3) There is a Municipal Incentive program known as the Lower Manhattan Commercial Revitalization Plan which provides $10.00 PSF in rent credits during a five- year lease; (4) The positive effect that the opening of Fulton Center and One World Trade Center is having; and (5) Continued development of a 24/7 community including schools, shopping, restaurants, hotels, etc.