New York Market Overview
- Total Manhattan Class A Office vacancies decreased from 9.9 % vacant to 9.8 % vacant
- Total New York City Office vacancy stayed at 8.4 % vacant
The across Manhattan office leasing market increases in average asking rents, leasing activity and absorption. Leasing activity in Manhattan has climbed to 15.6 million square feet from 11.9 million square feet. There was 8.3 million square feet of space leased in the second quarter, up from 6.8 million square feet. Manhattan had an average asking rent of $65.37 per square feet, vacancy rate of 8 percent, availability rate of 11.5 percent and absorption level of 1.45 million square feet.
An influx of tech startups and creative firms is making developers think twice before converting office space into condos.
international deep-pocketed buyers set has been particularly active throughout the country as of late, with foreign purchases leaping 35 percent between April 2013 and March 2014.
A building boom is under way in major markets as Real Estate Investment Trusts increasingly invest in new developments rather than pay inflated prices for existing properties. Office REITS plan to spend nearly $11 billion on new proje¬cts, primarily in New York and San Francisco. That’s the largest investment in at least a decade.
It is no surprise that prices for development sites are surging in Manhattan. Land prices in Manhattan’s most popular neighborhoods have doubled compared to two-to-three years ago.
The Manhattan office market roared on in the second quarter of 2014, as demand surged Downtown as availability declined in Midtown.
Average asking rents in Midtown South have nearly closed the gap with those in Midtown.
Combination hotel and condominium properties, a hot concept prior to the real estate crash in 2008, are now back in full force.
The total square footage of the Manhattan office market, which has been stable at just over 390 million since 1990, will see a net increase of 20 million square feet by 2020, reaching a new record high of 414 million square feet.
Office leasing volume for the first six months of 2014 was the strongest in a half-year period since 2002, led by large leases like the Bank of New York Mellon deal in Lower Manhattan.
Midtown Manhattan is already home to a huge number of skyscrapers, but the next generation of towers being built between 53rd Street and the south side of Central Park will be even taller.