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More Absorption Than A ShamWow!

New York
More Absorption Than A ShamWow!
Cushman & Wakefield's Maria Sicola
For the first time since 2007, overall absorption in US CBDs istrending positively, we learned from Cushman & Wakefield head of Americas research Maria Sicola, who says this is a promising signfor the US office market recovery. The overall absorption rate was a positive 2.2M SF at the end of the year—a 106.5% (you read that right) increase from the negative 33.5M SF posted at the end of ’09. Attribute it to increases in leasing activity and limited new construction. Overall leasing activity in the 31 CBDs Cushman & Wakefield tracks totaled 62.4M SF at the end of the year, up from 49.4M SF year-over-year. Nearly 17M SF of this activity was during Q4, making it the most active period since Q2 ’08.
Cushman & Wakefield's Joe Harbert and Ken McCarthy
Manhattan registered its strongest leasing quarter since ’06, with Q4 activity hitting 7.5M SF—the second-highest quarterly total and the highest since Q3 ’06. It’s an “incredible and heartening” uptick from the depths of the market 18 to 24 months ago, says C&W New York Metro region COO Joe Harbert, who presented the findings with senior economist Ken McCarthy at a breakfast at Michael’s on Tuesday. At the end of December, the average Manhattan office vacancy rate declined from 10.9% to 10.5%, the largest quarterly decline since Q2 ’07. All three submarkets saw significant declines, they report. Top deals included Société Générale’s 408k SF lease at 245 Park; Winston & Strawn’s 277k SF renewal at 200 Park;Meredith Corp’s 214k SF lease at 805 Third; and Natixis’ 185k SF lease at 1251 Avenue of the Americas.