Media, Not Wall Street, Drives Lease Activity

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Information and media companies leased more square feet of office space in Manhattan last quarter than financial service firms, according to new figures.

The finance industry still occupies about a third of all the office space in Manhattan, but information and media drove 27.8 percent of new lease activity compared with 26.3 percent for financial services, according Cushman & Wakefield's first quarter office report.

"I don't think it's necessarily an aberration," said Ken McCarthy, chief economist for Cushman & Wakefield. "Historically, financial has tended to be the dominant industry in terms of leasing space and in terms of occupying space. What we're seeing is media over the past couple of years has become a larger contributor to activity."

Among the notable media deals in early 2012 was Conde Nast's lease of an additional 133,000 square feet in One World Trade Center, increasing its footprint in the tower which is now under construction.

Some companies in the fast-growing tech sector are also counted under media and information, which may be one reason the vacancy rate has dropped, year to year, in Midtown South, a geographic designation that includes the neighborhoods around Union Square and Madison Square, which are popular with startups.

McCarthy said little prime office space is free in Midtown South, where the vacancy rate is now below 6 percent.

Manhattan asking rents for office space climbed in the first three months of 2012, hitting an average of $58.90 per square foot in March, while the vacancy rate was flat.

It's a further sign that New York City's economy is rebounding from the recession that began in 2007.