Jun 17, 2019
New York Real Estate Market Updates
Welcome to the New York Office Market Update
Here we dig into the latest data and trends to find out what is really happening in the local Office market to help landlords, real estate investors, and developers make the smartest financial moves.
So, what’s new in New York Real Estate? Let’s take a look at the numbers…
This quarter rents appear to have cooled slightly, with more inventory becoming available, and new office models expanding. Still, big players like Google and WeWork continue to be bullish on NYC real estate, as well as JP Morgan which is planning to move their headquarters.
Among the most notable stats, this quarter are a 17.9% drop in inventory in the Brooklyn office market year over year. While Manhattan’s availability rate rose slightly to 12.3%.
Total inventory stands at 451M square feet
Percentage available for lease is up to 12.3%
Absorption was negative by over 1.2 million square feet
Asking rents are up to $76.13 per foot
Over 19M square feet of office space is under construction
In Midtown leasing dropped 27.6% from the previous quarter
And down 49.1% in Midtown South
Leasing activity rose Downtown
The highest asking rents were found in the Far West Side at $119.03 per square foot.
The lowest asking rents were just $52.17 in the East Village
Notable leasing activity included:
And 280,000 square feet taken at the Rockefeller Center by Akin, Grump Hauser & Feld
Total inventory rose to 33.6M square feet
Percentage available for lease fell to 15.9%
The absorption rate is up
Asking rents are up to $51 per square foot on average
Office space under construction is up to 3.3M square feet
Notable leasing activity included Amazon’s expansion from Manhattan, with 54,000 square feet at Liberty Industrial Plaza.
Notable construction and renovation projects include:
In Terms of Market Factors & Economic Indicators
NYC employment rose to 4.6M in Q1 2019
Unemployment fell to 4.2%
Vacancy rates stood at 10.2%
Additionally, in Manhattan, while subleasing reached its highest level of available space in 35 quarters, new leases in Downtown posted their strongest first quarter on record. Over 9M square feet of new office space is coming online this year. Though 84% of it is already reportedly pre-leased.
Overall, this quarterly data suggests that the New York City office market is still in good shape. Far better than retail. Notable global corporations continue to prize prime property here. Many are expanding their footprints, with more expanding into Brooklyn, where rents are cheaper and more space is available.
While we should keep an eye on subleasing data, the strength of new and pre-leases suggests good balance in the market and not much to fear from new developments coming to market. There appears to be no lack of appetite for great properties in new locations.
With unemployment so low, upcoming job numbers may seem lean, though there isn’t much more of the population to employ. How much more office space we will need and be able to absorb may depend on recruiting more residents to the state, and continuing to make sure housing is affordable. Be sure to check out our multifamily reports for the latest data on the Brooklyn rental market.
Find out more about the current market, competing listings, and where to get the best help in leasing or finding the space you need by contacting The Ratner Team.
Make sure you check out our vendor section for all the best resources you need for renovating, financing, managing and protecting your real estate assets in New York. Plus, don’t miss our new report on Manhattan and Brooklyn Piers. Including where to go, how innovation is reinventing them as exciting places to hang out, workout and live.
Well, that’s this quarterly NYC office market update.
Leave us a comment and let us know what you are experiencing in the market, and what you’d like more detail on in the next report…
Thanks for tuning in!