Tuesday, May 26, 2009

Two-Thirds Off on Manhattan Office Space

by Bill McBride on 5/26/2009 05:38:00 PM

From the NY Times: Manhattan’s Sublet Office Market Is Bursting (ht Sunil)

In Midtown Manhattan ... 13 percent of ... Class A space — was available in April, up from 7.2 percent a year earlier, according to Colliers ABR, a commercial real estate services company. And sublets now account for some 40 percent of the space available in Midtown, compared with 30 percent of the much smaller total that was available a year ago, the company said.
...
Robert Sammons, the managing director in charge of research at Colliers ABR, said that sublet space in trophy office towers along Madison Avenue and Park Avenue has been leasing for as little as one-third of what that space might have commanded in early 2008, at the height of the roaring market.

“A year and a half ago, this space might have leased for $150 per square foot,” Mr. Sammons said, while he has heard of recent sublets in high-end buildings in this office corridor with annual rents of as little as $40 to $50 per square foot. “This is the most remarkable turnaround in pricing that I’ve ever seen in such a short period of time.”
No wonder S&P is concerned about CMBS.

Note: that $150 sounds high, so maybe it just half off!