market research

March 2018

March 2018 New York Commercial Real Estate Market Report

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Manhattan Office:
Manhattan office market facing some headwinds despite strong leasing demand, as 12.6 million square feet of office space is to be delivered in the next 24 months.

Manhattan Retail:
Retail leases continue to be signed as landlords adjust their rents to make leases economic for tenants.

New York Market Overview

  • Total Manhattan Class A Office vacancies increased from 8.6 % vacant to 8.9 % vacant
  • Total New York City Office vacancy increased from 8.0 % vacant to 8.2 % vacant
Market Overview:

Manhattan leasing activity totaled 2.96 million square feet in January, down roughly 34% from a year earlier.

January’s top 10 office lease deals totaled 1.2 million square feet, much lower than December’s top 10 leases, which totaled 1.8 million square feet.

Manhattan absorption fell last year to negative 544,000 square feet, as more supply was added in new towers on the Far West Side and Lower Manhattan.

Manhattan is getting 12.6 million square feet of new office space in 2018 and 2019, the most in any two-year period since 1985 and 1986.

Large, six-figure leases drove Manhattan’s office market last year to its second most-active year in more than a decade.

Total Manhattan Class A Office vacancies increased from 8.6 % vacant to 8.9 % vacant
January’s 10 biggest retail leasing deals signed last month totaled 95,000 square feet, from last month’s total of 179,000 square feet.

Retail sits vacant in nearly $1 billion worth of newly-bought Soho real estate, largely due to landlords holding out for tenants to pay near asking rents.

Sections of Bleecker and Christopher streets look a little post-apocalyptic and the retail real estate market is to blame. Amid skyrocketing rents and competition from e-commerce giants, like Amazon, a growing number of stores and restaurants in the West Village have shut down in recent years.

Asking rents on the stretch of lower Fifth Avenue between 42nd and 49th streets averaged $1,048 a square foot during the fourth quarter of last year, down 10% from a year earlier.

Industrial real estate prices are trending upwards across New York City. They are being boosted by the e-commerce sector’s demand for distribution centers, between 2013 and 2017.
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