Cresa's New York City Office tracks local real estate market statistics in the five boroughs of New York City: Manhattan, Brooklyn, Queens, the Bronx and Staten Island. The Office's primary focus is in the Manhattan submarkets of Midtown North, Midtown South and Downtown.
The City is home to perhaps the most broadly diversified array of companies operating within any of the world’s largest metropolitan areas. Manhattan remains the undisputed international hub for the financial services industry and, in addition, it is home to many of the world’s leading law firms and other professional services firms.
The City continues to attract an ever-widening range of creative services firms, including internet-based/technology companies, media organizations, publishing and communications entities. Such fast-growth organizations as Amazon, Google, Twitter, Gilt, Huffingtonpost.com and Facebook continue to expand here.
Cresa is active within the Manhattan office market on a daily basis and our professionals are knowledgeable about all significant current trends and market conditions. We offer unparalleled experience in addressing the needs of the business community - - whether finding the perfect space, negotiating favorable lease terms or arranging the optimal space layout, our team offers a range of invaluable resources to help tenants find the best solutions to their occupancy needs.
James A. Pirot
Senior Vice President, Project Management
Vice President, Project Management
With the availability rate falling, the average asking rent was up at an annual rate of nearly
9 percent in the second quarter over the first quarter’s level. For the past last year, the average asking rent is up by 6.9 percent.
Adding to the sense of activity and scarcity is the fact that the pace of leasing has remained solid, with numerous high profile and large transactions. The quest for space by the tech firms is driven by positive fundamentals. However, other prominent deals may not represent as positive a picture. For example, Sony’s sale of 550 Madison and move to 11 Madison as well as Time’s departure from 1271 Avenue of the Americas to 225 Liberty Street in Brookfield Place were driven by the need for less space and the requirement to reduce occupancy expenses on a square foot basis.
The high level of leasing activity has the impact of lowering the availability rate, particularly when the transaction involves a move well in the future. The space at the future location is taken off the market while the marketing of the currently occupied space is often delayed. Vacant space, however, is space that is not occupied and likely on which there is no lease in force. For Manhattan’s combined Class A & B space, the vacancy rate has actually increased over the last year; rising from 8.4 percent to 8.9 percent.
Manhattan enjoys the strongest office market in the U.S. and on a global basis certainly one of the most solid. At the same time and as just indicated, it is difficult to precisely quantify exactly how strong this market actually is. Several major forces complicate the situation.
For the first time in a generation, Manhattan is on course to add a substantial amount
of new space, with the World Trade Center, Hudson Yards, Midtown East, and assorted other projects around the City. Also, major capital expenditures on older properties have become the norm, which has and will add newly competitive buildings to the total inventory.
In addition to the new inventory, the underpinnings of the New York City economy are being transformed. Technology, professional services, advertising/communications, life sciences, and education are becoming the major drivers of the city’s economy. At the same time, financial and legal services are suffering from a fundamental shift in the regulatory environment and a slow growth global economy. The basic formulas that described how the New York City office property markets behaved in an economic recovery likely no longer work and new equations will have to be created as the city moves ahead.