Since that time, absorption has dropped off – mainly due to the general tightness of the class A market. As available space in the submarket dried up, absorption fell due to a lack of supply rather than demand. The CBD experienced record high occupancy levels during the robust performance period, which began in 1997. Recent occupancy levels have begun to taper and slow, reflecting the softer demand brought by a colder economic climate, rather than any addition of new supply. Soon rebounding into the upper 80s and lower 90s as the U.S. economy began its longest expansion in history.

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Unfortunately for Downtown landlords, however, the demand for Downtown office space has shrunk by even more than 35%. Quality-of-life issues appear to be the impetus behind the exodus from lower Manhattan.Read More