According to the tenant rep firm Studley, leasing velocity in Manhattan during the first quarter of 2010 was the highest it has been since 2005. The firm notes that during this time, available supply in Midtown fell by nearly three million square feet. Decreased availability in Midtown was also reported by another tenant rep firm, CresaPartners, as well as by CB Richard Ellis.

At W&H Properties, we're seeing a continuation of the high velocity experienced during our record year in 2009, with several transactions completed this spring with such national credit tenants as Aetna, AMSEC, Fidelity National Title, Lyoness US, Inc., Noven Pharmaceuticals, T.J. Maxx, and more.

Meanwhile, as leasing activity picks up, rents are stabilizing. At a recent press briefing, Joseph Harbert of Cushman & Wakefield observed that Manhattan asking rents are no longer decreasing, prompting tenants "to make leasing commitments now while prices are still low." CresaPartners forecasts that from 2012 to 2014, "rental rates will rise steadily."

Another growing trend is a reduction in tenant concessions. First Service Williams observed this trend toward the end of 2009, as it stated in its fourth-quarter report on the Manhattan office leasing market: "Our preliminary analysis of rent trends indicates that concession packages in at least some situations were not as large as they had been in the second or third quarters." And CresaPartners predicts that "recent market activity will give landlords enough confidence to hold firm on their concession packages."

By all accounts, it's clear that the markets have moved. With more than 1.1 million square feet in negotiations throughout the W&H portfolio, we have many instances of competition amongst tenants for the same spaces. It's evident that tenants and brokers recognize that leasing opportunities in top-quality product will be more expensive tomorrow than today, that today is more expensive than yesterday, and are acting accordingly.

If you or your clients are ready to start your search, we suggest that you begin by reviewing the space availabilities listed on page 6 of this newsletter. Tenants that lease space in a W&H building have the satisfaction and peace of mind of knowing not only that they seized an opportunity to secure a top-quality office space in a fully upgraded Pre-War Trophy building with unsurpassed access to transportation and amenities, but also that their landlord is financially stable and free of excessive leverage, with a strong track record and the ability to withstand economic fluctuations.

Don't get stuck in a less-than-ideal arrangement as opportunities disappear. Act now; call one of our leasing agents today.