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Midtown Office Blocks Vanishing Fast

Manhattan-based real estate brokerage Studley Inc. reports that large blocks of Midtown Manhattan, Class-A office space (defined as 150,000 sq. ft. or larger) are flying off the shelves — and as few as 18 such blocks were available in Midtown during the second quarter. During the year-ago quarter, by comparison, the Midtown market had nearly two dozen 150,000 sq. ft. plus blocks available.

“Many large tenants are reserving space in buildings under construction, such as the law firm Covington & Burling, which recently leased 160,565 sq. ft. at the 1.5 million sq. ft. New York Times building [set for delivery next summer],” says Steven Coutts, senior vice president, Studley. “Others are looking Downtown where the Class-A availability rate fell significantly to 11.8%, or 4.9% lower than it was at midyear 2005.”

Midtown’s tight vacancy helped New York City lead the nation in asking rent growth during the second quarter. Data from Manhattan-based real estate research firm Reis Inc. shows that New York City posted a 3.9% jump in asking rents during that quarter, followed by Fort Lauderdale and San Bernardino-Riverside at 3.0%. For tenants seeking space in Midtown Manhattan, the message is simple enough: Pay up, or look elsewhere.

The full 2006 Studley office report can be viewed here.

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