The vacancy rate for offices in Manhattan exceeded 10% in q2 and could rise as high as 15.5% in a year, CRE firm Cushman & Wakefield said on Tuesday.
The overall vacancy rate — which includes space that will become available over the next six months — rose 0.9 percentage point from the first quarter to 10.5 percent, the highest rate since the fourth quarter 2004, when it touched 11 percent.
The availability rate, which includes space available within the next 12 months, rose a full percentage point to 11.5 percent in the second quarter…The amount of space available to lease rose to 41.2 million square feet, the most in four-and-a-half years.
Asking rent in the second quarter fell to $60.23 per square foot, down 15.9 percent from a year ago, Cushman said.
Factoring in months of free rent and work space improvements, effective rent in Manhattan already is off 44 percent from the peak in the first quarter 2008.
Rising vacancy rates will logically keep climbing in New York, where the increasingly-shrinking financial industry is mostly concentrated and dominates office space.[ht Calculated Risk]