Manhattan office owners spending to keep tenants

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.