New York Market Overview
- Total Manhattan Class A Office vacancies decreased from 9.6 % vacant to 9.0 % vacant
- Total New York City Office vacancy decreased from 8.6 % vacant to 8.2 % vacant
The city’s investment-sales market limped listlessly through the first few months of 2017, with dollar volume falling by more than 50% from the same time last year. The first quarter of 2017 saw 846 properties trade hands for a total dollar volume of $7.06 billion. That was a drop of 33% from the 1,258 properties sold the same time a year ago, and a 55% decline from the $15.52 billion worth of deals inked in the first quarter of 2016.
Office: Office leasing activity was down in all Manhattan submarkets relative to the five-year monthly averages. Downtown Manhattan saw the most relative growth in office leasing activity of 257,000 square feet leased which was 78% better than last year, but still 40% below the five-year monthly leasing average of 427,000-square-feet. By comparison, leasing activity in Midtown and Midtown South was down 7 and 8% year-over-year, respectively.
Manhattan’s office landlords were offering increased concessions , up 3.3% from a year earlier. As more new office buildings come online and tenants continue to increase employee density , landlords are increasingly offering additional free rent and build out allowances.
Total Manhattan Class A Office vacancies decreased from 9.6 % vacant to 9.0 % vacant
Lower Manhattan saw 1.8 million square feet of office space leased in the first quarter of 2017. TAMI tenants now make up 26% of the market, compared to 19% in 2016.
Retail: Availability rates across Manhattan saw a 25% increase during the first quarter of 2017. The average asking rent in the borough declined 2.7%, to $850 per square foot from $874 per square foot during the same time last year. Asking rents fell in 12 of the 16 corridors, with Fifth Avenue between 42nd and 49th streets showing the largest drop at just over 17%. From cutting their rents to offering generous concessions, retail landlords are doing what they can to fill vacancies in their buildings, some of which are encumbered by hundreds of millions of dollars in debt.
Retail rents are down in most shopping corridors in Manhattan.
Net effective retail rents in Manhattan have fallen 20 to 30% from their 2014 peak. The estimate accounts for concessions, which have been on the rise across Manhattan as landlords try to keep face rents up.