NEW YORK, June 3 (Reuters) - Manhattan office tenants leased 2.6 million square feet in May, the largest amount since September 2006 before the financial crisis, according to a report by real estate services company Cushman & Wakefield.
The leasing surge — 221 percent higher than a year earlier in terms of square feet — pushed down the total Manhattan office vacancy rate to 11.3 percent from 11.5 percent in April, according to the report released on Thursday.
For top quality buildings, where rents are highest, the vacancy rate fell to 12 percent from 12.5 percent in April, the largest one-month percentage point decline since January 2007, Cushman & Wakefield reported.
“Without question, the Midtown Manhattan office market has stabilized,” Ken McCarthy, Cushman & Wakefield managing director of Research for the New York Metro Region, said in a statement.
“Considering the strength of recent leasing activity and positive developments in the New York and national economy, we feel it’s safe to say that the New York office market is in the early stages of a recovery.”
The average asking rent has fallen 25 percent to $54.35 in May from the peak of $72.97 per square foot in the third quarter of 2008, according to the report.
Over the past 10 months, the average asking rent has fallen $4 per square foot compared with the prior 10-month period, when it declined $14 per square foot.
The activity could be a boost for large New York office landlords such as The Durst Organization, Tishman Speyer, Boston Properties Inc (BXP.N), SL Green Realty Corp (SLG.N) and Vornado Realty Trust (VNO.N).
The overall Midtown Manhattan vacancy rate declined to 12.1 percent in May from 12.5 percent in April. The Midtown South vacancy rate, below 34th Street, fell to 9.6 percent from 9.8 percent. But Downtown’s vacancy rate inched up to 10 percent in May from 9.9 percent in April. (Reporting by Ilaina Jonas)