Miami's tallest apartment building is on the way.

Good morning, everyone.

• Construction of the tallest residential building south of NYC is about to get started, as PMG locks in a $668M construction loan.
  

• Dessert shop openings are up 52% year-over-year, with restaurant sales approaching $1T.
  

• The housing market won’t crash anytime soon, say experts.

Leasing activity hit 2.98 million SF, showing a solid 8.4% increase from April and an impressive 70% jump compared to last year. This figure is above the five-year average of 2.32 million SF, although it's still behind the pre-pandemic average of 3.58 million SF from 2019. Major deals driving this activity included Bloomberg's 947,000 SF lease extension at 731 Lexington Avenue and Bain & Company's new 235,000 SF lease at 22 Vanderbilt Avenue.

The overall availability rate in Manhattan improved slightly, dropping by 0.1 percentage points to 17.9%, with a positive absorption of 0.45 million SF. Since March 2020, availability has increased by 79.2% to 96.48 million SF, with most of the negative absorption happening before May 2022. Average asking rents rose by 0.6% in May to $74.59 per SF, although this is still 6.1% below the March 2020 average.

Midtown saw a significant boost in leasing activity, with 1.97 million SF leased in May. This represents a 75% increase from April and nearly double the volume from last year. Bloomberg's lease extension played a big part in this surge. However, Midtown's availability rate edged up to 16.2% due to new large spaces becoming available. Sublet availability also rose, reaching its highest level in nearly three years.

The average asking rent in Midtown went up slightly by 0.2% to $78.61 per SF, though it has fallen by 8.3% since March 2020.

In Midtown South, leasing volume dropped to 0.86 million SF, a 40% decrease from April, but it still more than doubled compared to May 2023. Key deals included Herrick, Feinstein’s renewal and relocation at 2 Park Avenue and Pontera’s new lease at 350 Fifth Avenue. The availability rate in Midtown South increased to 18.7%, with negative absorption mainly due to large new blocks of space.

However, the sublet supply decreased for the fourth consecutive month, signaling some market tightening.

The average asking rent rose by 0.8% to $81.11 per SF, a 4.1% increase since March 2020.

Downtown Manhattan experienced a notable drop in leasing activity, with only 0.15 million SF leased. This is a 25% decrease from April and more than a 50% drop from last year. The biggest deal was Kroll’s 48,000 SF sublease at 1 World Trade Center. Despite the reduced leasing volume, Downtown’s availability rate fell significantly by 1.1 percentage points to 20.4%, its lowest level since February 2023, thanks to the removal of 1.04 million SF from the market at 111 Wall Street.

The average asking rent in Downtown decreased by 0.4% to $57.04 per SF, the lowest since 2015, mainly due to lower-repricing and the withdrawal of high-priced spaces.