market research

December 2018

December 2018 New York Commercial Real Estate Market Report

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Manhattan Office:
Amazon coming to Long Island City and bringing 25,000 jobs which will increase office demand. Google and Facebook are also on the hunt for additional office space. New construction came online and vacancies fell slightly. The co-working/shared/executive offices are also on an expansion hunt so new office supply should be readily absorbed.

Manhattan Retail:
Retail continues to be quiet with main activity being renewals of existing tenants. Only a few nationals are expanding in New York City, Target. Prices still need to fall so that spaces will rent. The big question is when.

Building Sales:
Higher interest rates have had more of an affect on residential than commercial, although the question remains when will rates drive cap rates and therefore sales prices lower.

New York Market Overview

  • Total Manhattan Class A Office vacancies decreased from 11.5 % vacant to 10.9 % vacant
  • Total New York City Office vacancy stayed at 8.0 % vacant

Manhattan Office.

Manhattan office leasing activity surged by nearly 80% from the same time last year, as 2018 continues on its path toward a new post-recession record.

Office leasing activity, including both new leases and renewals, totaled around 3.97 million square feet. That was 76.7% above last year’s 2017’s. The largest lease was the City of New York’s 420,000-square-foot renewal at 90 Church Street. The Downtown sub-market’s largest deal of the year.

The Midtown office market is the most active since 2006, with a total of 13.9 million square feet leased . Of that total, 4.4 million square feet were added in the third quarter, the sixth consecutive quarter to surpass 4 million square feet leased.

Asking rents in Midtown stood at $74.41 per square foot, up 2% from the previous quarter, but down 3% from last year. In Midtown South, asking rents were at $77.15 per square foot, down 2% from the previous quarter, but up 7% year-over-year. .

Total Manhattan Class A Office vacancies decreased from 11.5 % vacant to 10.9 % vacant

Manhattan Retail

Fifth Avenue ranked as the second most expensive retail corridor in the world. Fifth Avenue between 49th and 60th Street ranked as the second most expensive retail corridor. In the second quarter, the area posted average rents of $2,250 per square foot.

The top 11 retail deals made public totaled over 353,000 square feet, well above the 98,300 square feet seen the prior month but most of the activity was renewals.

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