market research

December 2016

December 2016 New York Commercial Real Estate Market Report

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Manhattan Office:
Office pricing remains constant but free rent and work allowances are becoming more liberal in select markets.

Manhattan Retail:
Retail rents continue to decline as retailers insist that leases make economic sense.....

New York Market Overview

  • Total Manhattan Class A Office vacancies stayed at 9.2 % vacant
  • Total New York City Office vacancy decreased from 8.4 % vacant to 8.3 % vacant
Office leasing
Manhattan leasing activity stood at 28.13 million square feet year-to-date at the end of October, up 5.4% through the first 10 months of 2015. Year-over-year leasing activity in Midtown held relatively steady, down 8.2% compared to last year. In Midtown South, leasing activity was 420,000 square feet, down more than 50% from the same month last year. Tenants signed deals to take more than 2 million square feet of office space in October, down more than a third from the same period last year. Midtown South leasing volume between the beginning of July and the end of October fell to 1.3 million square feet, from 2.1 million square feet, a decline of nearly 40% compared with the same period last year. The decline in leasing volume has given tenants more leverage than in the past few years. Midtown East is taking a big hit as companies continue to sign up for office space at the Hudson Yards area. Based on percentage of square feet leased, 35.8% of tenants taking office space in Hudson Yards are coming from the Plaza District (33.7%) or the Grand Central District (2.1%).

Retail overview
Retail asking rents in large parts of Manhattan are falling as retailers shy away from making expensive long-term commitments. On Broadway between 14th and 23rd streets, asking
Total Manhattan Class A Office vacancies stayed at 9.2 % vacant
rents are down by 23% year-over-year. Asking rents are also down in Herald Square by 11%, Times Square by 9%, the Meatpacking District and Harlem. The exception is the Financial District, where asking rents are up, largely because of expensive space in new developments. Tourism remains steady . On Fifth Avenue in Midtown, landlords have not given up on big deals where asking rents are up 3%.
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