We wish you a Happy Holiday and a healthy and prosperous New Year.
 
2010 has seen changes in the New York commercial office space market. A good amount of sublease space has been rented, effectively removing low cost space from the market. Couple this with landlords willing to make short term extensions to maintain their cash flow, vacancy declines and net absorption increases.
 
Tenants have also been able to upgrade their locations, addresses and quality of space while keeping their costs down. Landlords  continue to offer attractive rents and concessions. Many landlords have also undertaken programs to pre build new units at attractive rental rates enabling them to lure tenants to move.
 
In the Grand Central District, for instance, the average rental rates are around $52.00 per square foot. In the high-end buildings, especially in the Plaza District, rents have risen dramatically to start at $100 per square foot with increases.
 
The Manhattan Class A vacancy rate has fallen to approximately 11.5%.  To put this in perspective, that is some 25,000,000 square feet available for lease, meaning there are plenty of good deals to be had. With less sublease space on the market, landlords will push to achieve slightly higher rents.
 
What will happen in 2011?
 
Tenants will be cautious to see what is going to happen to the economy. While the trend is toward recovery, it is hard to convince many company executives that this will happen any time soon.  Private sector employment has remained positive throughout 2010 and should continue or pick up in 2011.
 
What concerns the commercial real estate market is that the office jobs sector continues to be weak as companies in the securities, information and business services are reluctant to put on more people. They simply pile on more responsibility and longer hours to their existing staff rather than lease more space.
 
There is also a trend to hoteling, where companies establish a small office with minimal services in more remote areas of Manhattan and New Jersey to save money. Their people are encouraged to work remotely.
 
I see 2011 as an excellent opportunity for companies to extend their leases or move into better space while saving money and obtaining very good terms and conditions. I look forward to providing my clients and customers with the same hands on personal services that set us apart.

Richard Duryea, Inc.
420 Lexington Avenue, Suite 1632
New York, NY 10170

richard@duryearealestate.com

O: 212-697-4570
C:  917-861-3712
FAX:212-983-9097

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