3 Q Report & Forecast by Cassidy Turley Finds Stability in Manhattan & Some Struggles in Suburbs
TAMI Leads the Pack in Manhattan While Stamford, CT is Experiencing a Renaissance
NEW YORK – October 18, 2012 – Cassidy Turley, a leading commercial real estate services provider in the U.S., today released the Third Quarter Report for Manhattan and the surrounding Tri-State suburban markets. The report, prepared by Robert Sammons, Vice President Research Services for Cassidy Turley, found that Manhattan overall had the lowest vacancy rates with TAMI (Technology/Advertising/Media/Information) leading the way in Midtown South and the suburbs, particularly, Long Island showed positive absorption while Fairfield County has several interesting relocations pointing to a renaissance in Stamford, CT.
Relocations made up a majority of the activity in the Manhattan market with over 5.1 million square feet in transactions recorded. Midtown saw an increase in asking rents due to higher-priced Class A space hitting the market while the popularity of Midtown South with industry sector-leading TAMI favoring Class B and even Class C product. Suburban overall asking rents moved minimally for the quarter.
Investment activity has been sedate with little product coming to market while the scarcity of trophy assets has contributed to a deeper group of investors searching for both core and value add-properties in the hot Midtown South market. In addition, the report found that pricing levels are reaching pre-Lehman highs due to a smaller number of quality offerings as part of the reason for the increase, leaving pricing strong and robust.
“Manhattan continues to be the engine of growth for the Tri-State commercial real estate industry with fluctuations in a variety of submarkets,” comments Peter Hennessy President, Cassidy Turley. “Even though the next several quarters may demonstrate highs and lows, our deep bench of talent will guide clients and allow them to make the best informed choices as the regional economy proves its stability.”
Looking forward, the market will be in a holding pattern until the election is resolved and the looming “fiscal cliff” is resolved. In Manhattan, the report cites that a number of TAMI tenants are expected to make decisions about whether to stay, consolidate, or split operations and develop back office locations. Indicators are showing that some of these firms will choose the least expensive option, while keeping a presence in Manhattan. The forecast predicts that vacancy rates in Lower Manhattan will increase with blocks of space entering our availability numbers by early 2013. Overall, the report predicts major fluctuations over the next two, perhaps three quarters with the local economy holding fast and eventually coming out stronger with a more varied tenant base.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 3,600 professionals in more than 60 offices nationwide. The company represents a wide range of clients—from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $22 billion in 2011, manages 455 million square feet on behalf of institutional, corporate and private clients and supports more than 28,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate services—including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside of North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information about Cassidy Turley.