Manhattan Office Leasing Increases

According to a research report by Cushman & Wakefield, a privately held commercial real estate services firm, leasing in the office sector in Manhattan has increased 221% year over year in terms of square footage, thereby signifying stabilization in market fundamentals.
 
The overall office vacancy rates have decreased to 11.3% in May 2010 from 11.5% in the previous month. Although the average asking rent has plummeted 25% to $54.35 per square foot in May 2010 from its peak of $72.97 in the third quarter of 2008, it has relatively stabilized during the last 10-month period. Consequently, the overall New York office market shows signs of early recovery from the prolonged recession.
 
This is encouraging news for office landlords in the New York region such as Vornado Realty Trust (VNO - Analyst Report) and Boston Properties, Inc. (BXP - Analyst Report). Vornado Realty has a strong asset portfolio in the New York City and WashingtonDC. In addition, Vornado Realty is the largest publicly traded office REIT (real estate investment trust) in the New York region concentrating on Class A office properties. This provides Vornado Realty a competitive advantage to continually increase rents.
 
Boston Properties concentrates on a few select high-rent, high barrier-to-entry geographic markets, which usually fare better in a faltering economy. Two of the largest markets of the company, New York and WashingtonDC are still among the best of the office markets in the U.S. Furthermore, about 75.7% of the net operating income of the company was generated from the Central Business Districts during first quarter 2010.

Read the full analyst report on VNO

Read the full analyst report on BXP