New York

MANHATTAN office landlords are facing falling rents and heightened competition, spurring unprecedented spending to accommodate tenants.

Effective rents, the amount paid after concessions, slid 7 per cent in the fourth quarter from the previous three months to an average of US$57.18 a square foot, according to brokerage Savills Studley. Leasing has slumped and tenants are putting more excess space on the market for subletting - often a sign of weakness to come.