Rents Signal Rise of D.C., Fall of N.Y.

Rent prices in New York and Washington have long outpaced the rest of the nation — and by a wide margin. In the past, usually after recessions that shrink business and expand government, Washington has moved ahead. But this time, the gap has narrowed sharply and quickly. As recently as two years ago, average rent in midtown Manhattan was $61 per square foot, nearly $20 per square foot higher than the average in Washington’s prime downtown area. According to most commercial-real-estate brokers, the gap has nearly disappeared.

Current estimates put average rents in Manhattan at $60 per sq ft, so the collapse hasn’t been that bad there. But NYC rents fell almost at a 20% annual rate compared to 3% for D.C.