Manhattan Office Rents Jump 28% As Demand Moves Past Trophy

Manhattan's office price is now the concession package, not the quoted rent.

Avison Young data show new direct-lease rents at $99/SF, up 28% in twelve months through September.

Leasing did not drive it. Q3 year-to-date volume of 30.2M SF is flat year over year.

Availability, not activity, moved: 13.4% overall, 10.1% trophy, 10.0% Midtown Core, 3.7% Hudson Yards.

Base rents are $120/SF against net effective rents near $83/SF, a gap of about $37/SF (derived; the measures may not cover the same leases).

CRE Daily's CompStak-based table shows 17.5% rent growth for Q2, a different source and period.

Implications

Rising rent on flat volume means tenants are competing for fewer good floors. Underwrite to net effective rent, model free rent and tenant improvements as separate cash flows, and use the lower growth figure until mix effects are ruled out.

Flags: Average rent can rise from lease mix without any building repricing. The 28% and 17.5% figures cannot be reconciled from published data. Non-trophy availability is not reported. The $37/SF gap is a CRE360 derivation.