market research

January 2012

January 2012: New York City Marktübersicht

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Predictions for Manhattan Real Estate - Year 2012

Retail
Prime retail rents will continue to rise but not as dramatic as previous years. Fringe retail rents will continue to fall 10-20%.

Office Space
Class A office rents depend upon the financial success of Banking and Investment Banks. It's a seesaw, if more layoffs, then rents in Class A Office Buildings could fall 10-20%. If neutral to hiring of employees, prices will continue to rise until it is economically viable to build new office buildings (which needs to be about $100/RSF rent).

Class B office rents will continue to rise because some Class B Office buildings are being converted to residential and hotels (therefore less inventory of Class B buildings).

New York Market Overview

  • Total Manhattan Class A Office vacancies decreased from 8.8 % vacant to 8.5 % vacant
  • Total New York City Office vacancy decreased from 7.6 % vacant to 7.3 % vacant
Midtown Manhattan, Class A office vacancy decreased in November to 11.1 percent, its lowest level since 2008.The momentum seems to have generally slowed since the first half of the year. Class A average asking rents increased marginally for the month to $70.36 per square foot. In Midtown South however, Class A vacancy rose to 6.3 percent from 4.6 percent last month largely due to the addition of a large block of space at 101 Sixth Avenue at Hudson Square.

While the strength of Manhattan's high-end condominium market is strong the same cannot be said for sales of less than $1 million. While the fourth-quarter is historically a slower sales season, volume is down 12 percent this year from the prior-year quarter. That decline was keyed by plummeting sales figures for condos, as co-op sales figures were short just 1.3 percent from last year's fourth-quarter. Overall, closed condo sales sunk 24 percent from the final three months of 2010, and more than 30 percent for sales worth less than $1 million.
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