New York Market Overview
- Total Manhattan Class A Office vacancies decreased from 9.3 % vacant to 8.9 % vacant
- Total New York City Office vacancy stayed at 8.1 % vacant
Manhattan leasing activity totaled 8.96 million square feet in the second quarter. Despite good demand, there is 16.7 million of office space under construction which will continue to put pricing pressure for years to come.
There was an increase in all sublease markets. Midtown had a 3.6% increase and Midtown South 5.5% increase and Downtown has a 76% Increase. Downtown’s vacancy rate is expected to hit double digits in the second quarter because of the recent opening of 3 World Trade Center. The 2.2 million-square-foot tower was delivered with 45% of the space pre-leased.
Total Manhattan Class A Office vacancies decreased from 9.3 % vacant to 8.9 % vacant
Many landlords have lowered retail rents all over Manhattan, the average price of ground-floor retail dropped by 19.5% in 13 of the 16 shopping districts in the first quarter of the year. The one exception was Times Square where rents were slightly up to $1,993.
Fifth Avenue around the Plaza Hotel saw retail rents drop by 13.5% from the first quarter to the second quarter this year.
New York Buildings for sale:Manhattan investment sales saw a sharp increase in dollar volume during the first half of 2018 thanks to an uptick in big-ticket deals, notably Google’s roughly $2.4 billion purchase of Chelsea Market. There were more large-scale deals in the first half of this year than last year, with 15 transactions going for more than $100 million compared to nine in 2017.
Office property trades accounted for roughly $5.5 billion across 15 transactions and 20 buildings during the first half of the year. These were respective increases of 119, 25 and 33% compared to the second half of 2017.
It appears Manhattan commercial property sales are emerging from a two-year slump. More than $22.5 billion in sales of office towers and apartment complexes were sold in the first half of 2018, a 34% increase on the same time the previous year.
Midtown East has been the most popular neighborhood for property trades so far this year, with 49 transactions across 56 buildings worth $2.79 billion. In terms of dollar volume, Midtown West came in first place, with $4.92 billion across 30 transactions and 35 properties.