The Battle For Ground Zero, Part 172

Confounding experts in the real estate market, the economic vitality of Lower Manhattan appears to be stronger than ever. Vacancy rates are below 10% and more than 90% of office space is leased. What does that mean? Well, it means that more space is needed:

If that figure holds up when Cushman releases its definitive third-quarter report on Oct. 4, it would represent the first time downtown availability has fallen below 10 percent since December 2001.

Downtown's vacancies are higher than Midtown's 6.9 percent and Midtown South's 6.0 percent.

But it has less space available on a percentage basis than all but a handful of other U.S. business districts. By comparison, vacancies are 16.3 percent in Los Angeles, 16.4 percent in Chicago and 19.6 percent in Houston.

The 9.5 figure "is our projected number for the next report," said Cushman's New York office head Joseph Harbert. "We're thinking it's pretty good, and we don't expect a lot of surprises between now and Friday."

The data comes on the heels of a definitive agreement between the Port Authority and Larry Silverstein for rebuilding the World Trade Center site.

Downtown Alliance President Eric Deutsch says the news "marks a significant turning point from recovery to full-blown economic growth" in the area.

"It means we need more product and we need it fast," he said.

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