• Manhattan Office Normalized to 1.0 in Each Quarter
• Average Class A Asking Rent 1Q2008: $87.12
• Average Class A Asking Rent 1Q2009: $78.60
• One Year Change: -9.8%

While rents are declining across all of Manhattan’s Class A office submarkets, the relative attractiveness of the Plaza district has borne out in the first quarter PBSRE Office Index. Asking rents in Downtown have fallen to 0.67 of the Manhattan baseline. On the other hand, “trading up” to the Plaza has pushed the premium for this section of Midtown to a first quarter Index of 1.26 — up from 1.20 a year ago — in spite of lower asking rents.

NEW YORK VS. LONDON

London remains amongst the most expensive office markets in the world but its premium to New York has moderated over the last year.

What is the PBSRE Index?

The PBSRE Submarket Premium Real Estate Indices show the asking rent premium or discount for submarkets within Manhattan. Each quarter, the average asking rent in Manhattan is normalized to a value of 1.0. The indices express each submarket's average asking rent on the normalized scale. A value of 1.2 for the Plaza District means that the submarket commands a 20% rent premium in the current quarter.  So, if Manhattan's average office asking rent is $100 per square foot this quarter, the Plaza Disctrict’s average rent is $120.

What does the Index tell us?

The Index shows changes in the relative strength of Manhattan's different submarkets. For example, between 1Q2008 and 1Q2009, the Plaza's premium increased from 1.2 to 1.26, even though rents were falling in the submarket.

How is the Index calculated?

The Index is calculated based on the reported asking rents for space available in the market in each quarter. The sampling process is supported by primary and secondary data collection.

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