Office:
There is plenty of vacant space in Manhattan’s 600 million square feet of office space, though much of it is in aging buildings. Manhattan office leasing is on track to surpass 30 million square feet for the first time in five years. In 2018 office leasing was 43 million square feet.
Retail:
National chains enter New York City as availability of large stores are available and rental prices that make economic sense.
Building Sales:
Building sales were quiet as buyers are waiting to see if the economy picks up under Trump and if interest rates will decline.
Retail:
A flurry of retail leases along the Broadway corridor in Soho has helped drive down availability. Rents increase 35% year over year to $679 per square foot. Average pricing on the corridor has risen above $600 per square foot to a level not seen since 2017.
Office:
Increased office demand, as companies have their employees return to the office. Leasing volume was up almost 50% from a year ago, driven by Bloomberg’s 925,000-square-foot extension and expansion at 919 Third Avenue and a few other large deals.
Manhattan’s availability rate fell from 17.3 to 16.8%, the lowest in two years. Sublet supply also tightened, dropping to its lowest level since January 2022.
Building Sales:
Building Sales has been very active across property types. The predominant theme is to purchase office buildings to convert to Residential.
Office:
Manhattan office vacancy decreased, as office demand increases and office buildings are being converted to residential or warehoused.
650 Office building owners have expressed interest in converting to residential once the City of Yes has been approved. Manhattan office tenants signed deals for 23.1 million square feet in the third quarter, a 25.1% jump year-over-year. The vacancy rate dropped to 18.7% in the third quarter, the first time the quarterly rate fell below 19% since the first quarter of 2021.
Retail:
The availability rate for retail space was 14.7% for the third quarter of 2024 with 202 vacant shops. This was down from 15.3% availability rate and 210 vacant stores in the second quarter of the year. Largest leases were for schools, event spaces and retail stores.
Sales:
Many Class A and B office buildings that were overleveraged are coming back to lenders through UCC auctions and negotiated jingle mail.
Office:
Manhattan’s overall vacancy rate is at 23%, a historic high.
Retail:
Grocery stores, gyms and fashion were active in leasing last month. Increased office attendance will increase demand for retailers.
Sales:
New York commercial real estate sales volume is low. Companies are noncommittal on return-to-work policies. Banks are reluctant to foreclose.
Office:
There is an increase in demand for Class A and high floors in Class B buildings. The rest of the office market is not renting and will likely become residential, if a conversion is possible.
Retail:
Retail leasing has picked up, as more workers return three days a week to the office.
Gym, Pubs and stores were the largest leases signed last month.
Buildings Sale:
Manhattan building sales were quiet in August. Uniqlo bought their own space at 666 Fifth Avenue for 350 Million and a large apartment building at 20 Exchange Place sold for $370 Million. Everyone is waiting to see if and when interest rates will decline.
Office:
Financial firms fueled Class A Midtown office leasing, signing large lease extensions and expansions. Large blocks of high floor office space in Midtown and Plaza District, Class A vacancy are scarce.
Retail:
Sephora renegotiated a lease for 6,300 square feet on the ground floor at 520 Madison Avenue for another 18 months with a price reduction of two-thirds.
Building Sold:
A number of buildings listed are being foreclosed on which will make its way onto the sales market once the deed-in lieu of foreclosure is completed.
Office:
Office leasing volume increases meanwhile 64 office building owners have started looking into residential conversions.
Retail:
Retail leases continued at an increased rate, as new retail entrants to New York City enter or expand.
Sales:
Higher interest rates and cost of capital have lowered valuations of all property types. Office building owners are finding it better to cut their losses at a discount rather than play out a distress scenario.
Office:
The Manhattan office market showed increased leasing activity in Midtown, Midtown South and Downtown. Leasing demand grew to 2.75 million square feet. The availability rate held steady from last month at around 18%. Many A and B office buildings have announced conversion to residential which will suppress the availability rate going forward.
Retail:
Retail asking rents are increasing but are still 20 to 30% lower than before Covid. Demand for Top locations in Soho, Madison Avenue, Times Square, Upper Fifth Avenue and Midtown East have increased activity. Manhattan’s retail availability rate was 14.1%.
Sales:
Development sites and older office building conversions to residential lead demand. Landlords and their lenders are finally willing to move forward with building sales at substantial losses.
Office:
Manhattan’s office availability rate was 18.1% in March. That’s 0.1% better than the February number, but a record high for the end of a quarter.
Millions of square feet of Manhattan offices are earmarked for residential conversion. SL Green taking 750 Third off the market as it planned a conversion.
Retail:
New York City’s retail landscape grew tighter with average vacancy down to 15.4%.
Sales:
Landlords seek to return underwater office buildings back to their lenders. Some older office buildings are being sold at bargain prices in order to convert to residential.
Office:
Manhattan office vacancy hits a new all-time high. Leases are getting smaller and asking rents are falling. Competition is fierce for the highest-quality buildings. Overall, availability was at 20.1%.
The 6.8 million SF of deals in the first quarter was down 22.9% from the previous three months and a 6.6% dip from Q1 2023. It was also the slowest quarter in three years.
Retail:
Retail Stores, restaurants, gyms and medical signed leases last month.
Sales:
There were over 1,900 all-cash commercial sales worth $100,000 or more in New York City since the start of 2023 and the biggest was just shy of $1 billion. Luxury Retailers are buying the buildings they occupy on Fifth Avenue.
Retail:
Retail asking rents are on the rise in Manhattan, but still well below pre-pandemic levels. Sustained activity was a welcome development for the sector. Average asking rent is 20 to 30% lower than it was four years ago, hindered by office visitation numbers.
Manhattan Office:
The vacancy rate in Manhattan Office remained at a record-high of 17.9% in the fourth quarter.
The high end of the office market is doing well. The low and moderate range of the office market sector is suffering.
Building Sales:
Luxury retailers are buying Fifth avenue locations to house their brands. Prada bought 720 and 724 Fifth Avenue and LVMH is rumored to be in the market to buy the retail base at 745 Fifth Avenue.
Office:
Renewed demand for Manhattan Class A office space continues, as law firms and financial firms signed the largest office leases in December. Companies continue the flight to quality office space with amenities.
Retail:
Colleges, parking, gyms and grocery stores dominated the largest leases last month.
Building Sales:
Office building landlords continue to hand back the keys for their office buildings to their lenders.
High interest rates are dampening price expectations and until prices adjust, the sales market will remain quiet.
Manhattan Office:
Leasing activity was slow as only 2 million square feet was rented in November.
Manhattan Retail:
Prime Manhattan retail stores continue to be rented with Ground-floor retail availability dropping 16.5% in 2023. Increased tourism and demand for luxury products are helping retail sales.
Building Sales:
New York City office sales are down nearly 50% from last year. Some landlords have opted to return buildings to lenders rather than face discounted offloading that does not show up in comparable sales figures.
Office:
Manhattan available office space is at an all-time high of 19.4%. Davis, Polk and Wardwell signed a 710,000-square-foot extension and expansion at 450 Lexington Avenue and the New York City government leased 641,000 square feet at 110 William Street.
Retail:
Retail rents are inching higher as tourism increases and office workers slowly return.
Building Sales:
Buildings sales slowed as interest rates are near recent highs and banks lending on commercial properties is reduced or is in limited supply.
Office:
Leasing activity fell 25.6% year-over-year. Manhattan experienced a 10.5% drop in leasing activity from 2022 to 2023 with a vacancy rate of 17.8% and 96 million square feet of available space.
Companies leased 2.5 million square feet in Manhattan last month. 25% was from Davis Polk & Wardwell’s extension at 450 Lexington Avenue for 700,000 square feet of new space.
Retail:
Retail leasing is picking up where landlords can lower their rents to the current market pricing. On Third Avenue, a landlord signed an avenue lease for $100/SF.
Sales:
Manhattan building sales picked up, as sellers lowered prices to reflect the new reality of higher interest rates and lower rents.
Office:
The Manhattan office market continues to struggle in a post-pandemic world. In the second quarter, office availability reached a record-high 7.03 million square feet. The 19.7% vacancy rate was the highest since the onset of the pandemic.
As the office market continues to struggle, just 10% of office buildings account for the surge in vacancy rates. Office vacancy was 18.2% last quarter, the worst in 30 years, and is expected to continue creeping up.
Retail:
Manhattan retail remained busy with several new stores opening. Demand for retail space has increased with the return of tourists and an increased office occupancy.
Sales:
Rising interest rates and falling net rental rates for retail and office space will put downward price pressure on sellers. Some sellers will want to give back the keys to the Bank, if not they will have to pay the shortfall in sales proceeds at closing.
Office:
Office tenants are now asking to look at owners' books before signing leases.
Retail:
Increased tourism and lower asking retail rents are enticing tenants to sign leases.
Sales:
The sharp rise in interest rates has slowed transaction activity in markets across the nation and in New York. Investment sales in New York City dropped at least 36% year-over-year in the first half of 2023. Industrial sales down 63%, Special purpose down 52%,Office down 48%, multifamily down 41% and retail/hotels down 36%.
Office:
Manhattan Class A Landlords are offering up to 24% off of rent on concessions. Class B and C office landlords are offering a combined 16.8 to 21.3% of rent on concessions with terms of at least seven years.
Retail:
The Retail rental rate bottom has been established for Manhattan Retail. Prices are unlikely to improve substantially until full office occupancy and tourism return to previous levels.
Sales:
Building sales were slow. Underwater office landlords are negotiating, giving back the keys to their lenders.
Office:
New York City Mayor, Eric Adams, has proposed zoning changes and tax incentives to convert 136 million square feet of office space into residential units, potentially creating 20,000 new homes for 40,000 residents.
Retail:
The vast majority of retail leases signed last month were not chain retailers. These diverse retailers and users think the demand is there for them to come in or expand their store count in New York City.
Sales:
The sales market for office properties is at a virtual standstill. It’s a tough time to be selling offices. New York City office sales totaled just $470 million in the first quarter, down 85% from $3 billion a year ago.
The first quarter had just one office sale. It was priced at $650 per square foot, down from an average of $865 in the fourth quarter across seven deals. In the first quarter of last year, the average price was north of $1,160.
Office:
1.4 million sf of office leases were signed in Manhattan, a 43% decrease from a year ago. 17.0% of Manhattan offices are vacant. Asking rents remain high but Landlords have increased concessions so that tenants are getting a lower net price. Landlords are desperate to fill their vacant spaces.
Retail:
The apparel industry signed 27 leases for 243,000 square feet. LVMH took 43,000 square feet at 4 East 57th Street. Food and beverage companies had more than a dozen more deals than apparel, but for roughly 100,000 fewer square feet overall.
Sales:
Investors remained mostly on the sidelines for the quarter, totaling $980 million — an 85% year-over-year decline.
Office:
Office leasing was quiet. Meanwhile, new office buildings are being built which should put pressure on prices for new Class A offices. Class B and C office prices continue to decline.
Retail:
Retail tenants are finding better deals by relocating to new spaces as hungry landlords compete for tenants.
Sales:
Rising interest rates and mortgages coming due are forcing sellers to sell or give back the keys to the lenders, as property income has dropped and expenses have risen.
Office:
The health of Manhattan’s office market continued to decline in 2022, as return-to-office initiatives fizzled yet again and hybrid workplaces became the new normal.
Office leasing activity plunged year-over-year in the fourth quarter, ending 2022 more than 30% lower than in the last quarter of 2021.
Retail:
Retail was quiet. Retail tenants are relocating to get better deals.
Sales:
Office investment sales have plummeted. Manhattan saw $1 billion in sales volume in the fourth quarter, an 85% decline from 2021. It was the largest annual decrease in five years. The median sale price was $725 per square foot, down from $874 the previous year.
Office:
The Manhattan office market leasing plummeted 43% year over year in the fourth quarter, as tenants rented 4.9 million square feet in 2022, the lowest quarterly total since the second quarter of 2021.
76% of office occupants moved to another Class A property or upgraded to a Class A building.
There were 190 office leases for at least $100.00 per square foot last year. The record was 164 leases recorded in 2021, accounting for 6.1 million square feet
Retail:
Retail vacancies declined from 229 available spaces to 222 and retail rents improved modestly, up 1.2% from the third quarter and 2.9% year-over-year.
2.5 million square feet was leased in the last 12 months. 11.6% above 2021 levels but current quarter leasing volume was down 9.7%, from the previous quarter.
Sales:
Manhattan saw $1 billion in sales volume in the final three months of the year, an 85% dropoff from 2021, for the largest annual decline in five years. The median sale price was $725 per square foot, down from $874 the previous year.
Manhattan Office:
Only 6.1 million square feet was leased last quarter. 50% lower than the previous year's quarter. Many landlords are considering converting their office buildings to residential with possible help from the NYC government.
Manhattan Retail:
Manhattan retail rents remain stagnant, even as foot traffic returns. Tourism has picked up and a % of the office employees are back, but retailers are holding out for more aggressive pricing and terms from Landlords.
Building Sales:
Building sales were active, despite higher interest rates which seems to be counter intuitive. Time will tell if this continues but unlikely.
Office:
Manhattan Office leasing is down almost 50% in November versus November 2021. Some companies' leasing plans are on hold, until they see if the Federal Reserve interest rate hikes will cause a recession. Big tech firms are looking to sublet 30 million square feet across the country, up from 9.5 million square feet.
Retail:
Fifth Avenue retail stores are filling up again. Upper Fifth Avenue, from 49th Street to 60th Street, has reclaimed its No. 1 spot among the world’s most expensive retail districts.
Sales:
New York’s new developments used to be more than 350 deals a month. Now, developers reported 171 deals last month, down 20% from September and 36% from October 2019.
Office:
Uncertainty of rising interest rates combined with work from home trend is reducing future office demand.
Manhattan office availability rate dropped in the third quarter to 16.4% Availability shrank to 16.7%. Tenants leased 9.2 million square feet, up 26% from the previous quarter and 28% from the same period last year.
Retail:
Retail leasing has picked up dramatically, as landlords have lowered retail rents to levels tenants can afford and street traffic has picked up.
Sales:
Commercial property sales are falling. In the third quarter, investors purchased $172.2 billion of commercial property, down 21% year-over-year. Pension funds are cooling on commercial real estate loans, as borrowing rates rise which is limiting new investments in the sector.
Office:
New demand for office space in New York City dropped 23% compared to the prior month.
Existing companies are renewing their leases on expiration but renting new space that is 10-30% smaller.
67% more space is available than in March 2020. Some 3.4 million square feet of office space was leased in August, the most since January 2020, when the first Covid cases began to pop up in New York City.
Retail:
French department store Printemps is to open its first US store at 1 Wall Street and is renting 54,000 sf. Madison Avenue had 5 new store lease announcements. Street traffic has increased and landlords are being reasonable in pricing to get deals done.
Building Sales:
Opportunistic deals abound, as building sales had an active month. The market will need to reprice due to future and expected Federal Reserve interest rate hikes.
Office:
Office occupancy has been stuck at the 40% mark. Major tech companies have announced they are pulling back on plans to expand. Some are putting up space for sublease, demonstrating the sticking power of work-from-home arrangements.
Retail:
The top 10 retail leases accounted for more than 175,000 square feet.
Manhattan retail leasing saw a 23% increase year-over-year. Fashion brands and global food chains cashed in on the opportunity to occupy Manhattan’s retail space.
Building Sales:
Building sales are expected to decline due to higher interest rates, as buyers wait for lower pricing and lenders cease activity.
Investment sales in the first half reached a total volume of $21.6 billion. Volume slowed slightly in the second quarter, though, there was $9.8 billion transacted.
There were 554 transactions in the second quarter, involving 719 properties. Core property types averaged $582 per square foot in the trades, down from $604 per square foot in the first quarter.
Office:
Remote work and demand for office space have dampened demand, with net absorption of 530,000 square feet in the second quarter, and a negative 38.9 million square feet of absorption since Covid. The vacancy rate in Manhattan for the second quarter was 17.2%, down slightly from the previous quarter.
Retail:
Major retailers continue to look for new spaces, as retail traffic continues to increase in New York.
Building Sales:
Building sales that closed were active this month. The question is how quickly will sales prices react to higher interest rates and will buyers and sellers agree to the new market prices?
Office:
Office demand increases but tenants are renting smaller spaces/employee than before Covid. Office occupancy exceeded 40%, the highest level since the pandemic began. Hybrid work and remote work seem to be here to stay. This could be devastating to office building values.
Retail:
Retail asking rents show signs of recovery, along with increased foot traffic from tourism and returning office workers. Vacancy rates for retail space are declining but have a long way to go.
Sales:
A slowdown in investment sales could be on the horizon. as economic headwinds loom.
Office:
Availability rate hit a record high of 19% in the first quarter, as companies go with hybrid offices. About 90 million square feet were available to rent but leases for only 7.7 million square feet were signed.
In Manhattan, sublease space is near record highs of 20.2 million square feet available, down from 22 million square feet available a year ago, but well above the 13.6 million square feet prior to Covid.
Retail:
Manhattan retail rents tick up, as foot traffic from residential and tourism recover along 9 of 17 corridors. Major concessions and accommodations done during covid for retail tenants are severely diminished.
Harlem's retail traffic is down just 5%. SoHo is more than 60% below its prior retail traffic. Manhattan office district street traffic is still quiet, as office workers adopt a hybrid office model.
Sales
A building market slowdown is on the horizon, as rising interest rates drive up borrowers’ costs.
582 properties sold in the quarter, a year-over-year jump of 53% totaling $8.9 billion, a 320% increase from the first quarter of last year and roughly in line with the first quarter of 2019.
Office:
The hybrid work model for the foreseeable future will continue which will create office demand destruction. Only 37% of New York-area workers went into the office in late March.
The average asking rent for Manhattan office space stood at $68.65 per square foot, following eight consecutive quarterly declines.
Retail:
Street traffic has increased dramatically from tourism, residents returning and a portion of office workers returning. The increased foot traffic should create a bottom on the retail store pricing, as demand is picking up. Asking rents have fallen an additional 5% in the past year.
Hotel revenue from business travel will remain 23% below 2019 levels in 2022.
Sales:
Brookfield sold a 49% stake in One Manhattan West to Blackstone in a deal that valued the 67-story office tower at close to $3 billion.
Developers signed 461 residential contracts worth $1.1 billion. The median unit sold for $1.61 million, or $1,641 per square foot. The median unit price has risen 25% since March 2021. Prices are stabilizing as mortgage rates rise.
Manhattan Office - Overview:
Manhattan office vacancies soared to 19%. Demand seems to be bifurcated between Class A and High-End buildings. A strong demand exists and low demand for B and C Buildings. Downtown vacancy rates have increased to 25%.
Manhattan Retail - Overview:
Manhattan street traffic is up as visitors return to New York City and office occupancy levels rise. This bodes well for a slow return to retail leasing.
Buildings for Sale - Overview:
Building sales activity picks up as investors and sellers reprice to the new normal. Blackstone Real Estate bought a 49% stake in One Manhattan West, valuing the 67-story office tower at $2.85 billion. Residential remains active. Pricing for Class B and C office buildings decline.
Office:
Manhattan’s office market hit a vacancy rate of 17.3% at the end of 2021, up by one-fifth from 2020. Leasing activity accelerated during the year, rising 60% in the third quarter and finishing the year at more than twice the pace of 2020’s fourth quarter.
Retail:
Retailers on Fifth Avenue and Times Square have just begun to look for new locations.
Sales:
A preliminary NYC budget shows office properties have lost 7% of their value in the last two years, dropping from $172 billion to $160 billion. Retail properties have declined 11.9%, from $63.8 billion to $56.2 billion. $136 billion was spent on office portfolios and properties last year, compared to $87 billion in 2020. Commercial real estate investors spent $49 billion in New York.
Hotels estimated value declined 19.6%, from $32.7 billion to $26.3 billion.
Office:
New office construction continues to add new inventory into the Manhattan office market which will put downward pressure on Manhattan office rental rates. Last month, major office leases were announced from relocations and a few expansions. Meanwhile, small and midsize businesses are looking for short-term alternatives until covid abates.
Retail:
Manhattan’s retail is slowly making a comeback. Last quarter, leasing velocity increased to about 1.86 million square feet, up 17% from the prior quarter but still 14% below the prior year. Availability in the fourth quarter decreased to 266 spaces from the 282 recorded in the third quarter. On Broadway in SoHo, availability dropped 24% from 25 to 19 spaces.
Building Sales:
Forty-seven percent of new leases last year included rent hikes, with those rents rising by an average of 17% above 2019 levels. Another 28% saw decreases in rent, averaging 15%. Renewal rates were up compared with before the pandemic, with 64% of those who could renew doing so, up from 59% in 2019.
Office:
Omicron puts going back to the office plans on the back burner again. With record case numbers of COVID-19, companies are delaying office returns and sending workers home again.
Manhattan’s office market recovery continued and ended the year with its best quarter since 2019, but a flood of new office inventory means a return to pre-pandemic normalcy may still be far in the future.
Office tenants in Manhattan signed more than 3 million square feet of leases in November, the first month to exceed that mark since January 2020’s 3.6 million.
Manhattan’s monthly office leasing volume in 2019 was about 3.5 million square feet on average, while the 2020 monthly average was about 1.5 million.
Retail:
Omicron is waying on retailers both in terms of staffing and product availability. Retail demand is expected to be weak until Omicron is under control.
Sales:
New development contracts in 2021 totaled $1.54 billion, a 150% increase from last year and 77% jump from 2019.
This year, 898 new development contracts were signed. The average home signed was 1,220 square feet, a five-year-high, and price-per-square-foot climbed to $1,680, up 43% year over year.
Office:
Office tenants signed leases for 2.7 million square feet last month, up 10.8% from September and the highest amount monthly since January 2020’s of 3.6 million square feet.
Despite discussions over a hybrid working model that could lead to smaller offices, landlords in their third quarter earnings calls were largely optimistic about the future of demand for quality office space.
Retail:
Foot traffic picks up in Times Square and Soho as domestic tourists and office employees start to come back in increasing numbers to Manhattan. This increase in foot traffic will increase demand for retail stores.
Sales:
Strong demand for apartments of filled Class A office towers continues. Class B and C office buildings without full rent paying tenants lag, as the market decides what their current value is.
Sales:
Google is going to buy its 1.3-million-square-foot office building at 550 Washington Street for $2.1 billion. This affirms Manhattan’s office market viability for large corporate tenants.
Meanwhile, the market value for office buildings in New York City fell $28.6 billion last fiscal year, per the state comptroller; it was the first decline in value since at least 2000.
Office:
Over the past year and a half, net absorption remains negative at 36.6 million square feet. More office supply is scheduled to be available in the coming months.
Manhattan Office leasing volume last quarter jumped to 7.23 million square feet, up 58.8% from the second quarter. Net absorption was 0.86 million square feet.
Manhattan’s sublet availability shrank by 0.86 million square feet to 19.94 million square feet and accounts for 22 % of total availability. Sublease space is still about 2.5 times the pre-pandemic amount of 8 million square feet.
The average office asking rent for the quarter was $72.74 per square foot, down less than 0.1% from the second quarter
Retail:
Manhattan’s retail rents plunge by the largest amount in five years. Manhattan retail rents plunged again even as the city comes back from the pandemic. Average asking retail rents fell almost 12% across all major Manhattan shopping corridors. Herald Square saw a 27% decline in rents, as the priciest spaces were taken off market.
Office:
Manhattan Office leasing has picked up, and vacancy rates declined to 16.9% in August, down from 17.1% set in May and July. Office occupancy in Manhattan remains at 38% in New York City.
Workers’ return-to-office plans have been largely disrupted by an increase in COVID-19 cases driven by the Delta variant.
Buildings for sale:
Investment sales remain 2.2% below a year ago. Google’s purchase of St John terminal was a huge vote for the long-term demand of office space in NYC.
Hotel buildings have traded at a discount, as tourism and business travel are still slow.
Retail:
Retail demand is picking up as more tourists, office workers and residents come back to NYC. This retail demand will continue to increase, as more and more people get vaccinated.
Office:
The Delta variant has caused return to the office to be delayed for some firms until January. The Manhattan office vacancy rate in Manhattan last month was 17.1%, matching a record high set in May. The average asking rent was $72.72 per square foot, down 8% from a year ago and the lowest level since 2017.
Buildings for sale:
New York City investment sales doubled in dollar volume from a year ago, but was still well below 2019's second quarter, when nearly $10 billion were closed.
Retail:
Foot traffic has increased, but still lower than pre-COVID-19 levels. Madison Avenue is at 71% of regular foot traffic, Fifth Avenue is at 92% and Soho foot traffic is 110% of its 2019 levels.
Additional increases in retail traffic are expected as more office employees return to the office and business and tourist travel return to normal levels.
Office:
Manhattan’s office availability rate was 17% down 0.1 percentage than the record-high May figure of 17.1%. Only 21.4% of Manhattan office workers were going to their offices as of June 23.
Manhattan office leasing tours have increased dramatically to levels near before the Covid lockdowns as companies consider their options for the coming months.
Retail:
Statue of Liberty visits were up 22%, Museum of Modern Art increased by 65% over the last 11 weeks. This bodes well for retail demand as tourists return to NYC and office workers return to their New York apartments and jobs in September.
Building Sales:
Manhattan’s office investment sales had total sales for the second quarter of $1.6 billion, quadruple the record-low amount during the first quarter.
Office:
Manhattan’s office availability rate hit another all-time high of 17.1%. Overall, 1.53 million square feet of office space was leased, up 8.2% from a year ago. The average asking rent last month was $73.25 per square foot, a decrease of 7.5% from the same time last year.
Leasing volume was slightly lower than the 2020 monthly average of 1.58 million square feet and less than a half of the 2019 monthly average of 3.58 million square feet. Monthly absorption was negative at 3 million square feet.
The sublease decline was partly attributed to companies that decided to reoccupy spaces that they had once marketed for subleasing. It is too early to tell whether this is the beginning of the end of the sublease surge.
Retail:
Asking retail rents have plunged for vacant retail spaces among the 17 major shopping corridors in Manhattan. Since the meltdown in 2015, the average asking rent has declined between 50% and 68%.
Apparel sales are surging. Subway ridership is at a 15-month high. Lines of customers are forming at Midtown food shops during the lunch rush. New York City’s office workers are slowly returning to workplaces abandoned since Covid.
Building Sales:
Office buildings’ market value, not their real-world worth, but the metric used by the city’s Department of Finance dropped by 16% across the city. The value of some major skyscrapers was cut by more than $100 million.
The value of hotels and retail property fell by more than 20%. The lodging industry is especially struggling. The St. Regis and the Four Seasons saw their taxable value cut by 36%. The New York Midtown had a cut of 13% on the final tax roll.
Office:
Office availability rate in Manhattan climbed to 16.5%, the highest it’s ever been, up from 10.3% in April 2020. Leasing activity is increasing as companies are looking for and evaluating their space needs. About 980,000 square feet of leases were signed last month, down 46% from March and 27% from a year ago. Leasing volume was also a staggering 75% below the pre-pandemic monthly average in 2019.
Retail:
Retail has “all of a sudden become very active” as more people get comfortable with the idea of coming back to the office. Street traffic has risen dramatically and is now 25-30% precovid levels.
Sales:
New York City’s investment sales market hit a new low in the first quarter of 2021. The total dollar volume of deals recorded in the first quarter was $1.84 billion, down 75% compared from the same period last year, and down 67% from the fourth quarter of 2020. It is expected that sales activity will pick up as the covid cases decline.
Office:
The average term of leases signed in the first quarter was 5.8 years, with 6.9 months of free rent and a tenant improvement allowance of $61.90 per square foot.
About 17.3% of Manhattan office space is available for lease, the most in decades. Asking rents are at roughly $74 per square foot, down from $82 in early 2020. In April Office occupancy rate for Manhattan offices was about 13.5%. Only about 45% of employees will be back in offices by September. 56% of employers said that their employees will work remotely at least some of the time.
Retail:
There are 32 vacant storefronts along 17 blocks of Fifth Avenue in the Midtown area, which is some of the most expensive retail real estate in the world.
Retail leasing velocity in the first quarter of 2021 fell for the seventh consecutive quarter. Total leasing was down 26.3% from the previous quarter, and nearly 59% from a year prior, before Covid lockdowns took hold of the city.
Buildings Sales:
Office investment sales remained “largely halted” in the first quarter, with only $400 million in total sales. That’s a decrease of nearly 90% compared to the first quarter of 2020, when $3.8 billion in deals was recorded.
Office:
Office availability hit 15.5%, the worst on record. Tenants have been increasingly putting their offices up for sublet since June.
The rise in supply is outpacing demand. Manhattan’s office availability set another unfortunate record at 15.5%, up 0.6% points from January and 5.6 points from a year ago. Total space leased in February was 900,000 square feet, down by 51% from the volume in January and by 57% from a year ago. rebound.
Retail:
Retail rents continue to fall.
Sales:
Building sales were quiet this month.
Manhattan Office:
Manhattan office vacancies have surpassed 15% as subleases, new construction and expiring leases are not being renewed due to corporate downsizing. Expect office rents to fall in the foreseeable future.
Manhattan Retail:
Expect retail rents to fall as 30% of the remaining restaurants fail. Other retailers will be forced to turn over empty spaces when landlords are able to pursue evictions.
Manhattan Sales:
Expect sale prices to continue to fall as office, retail and residential rates continue to fall. Prices for Manhattan’s office condominium market showed a 32% drop in price per square foot, from $909 to $616 from the previous year.
Manhattan Office:
Manhattan’s office availability hit a record high of 14.3%. This is 16.3% higher than the third quarter vacancy rate and up 43% from a year ago. 24.2% was sublet inventory, which expanded by 6.45 million square feet in the past year.
Overall, the pandemic left a large scar on Manhattan’s office market in 2020, reducing annual leasing by 56% to 18.9 million square feet.
Manhattan Retail:
Manhattan retail saw average asking rents drop from 1 to 25% year over year. Soho, Fifth Avenue and Madison Avenue saw the lowest asking rents in at least a decade.
Available retail space is also on the rise, with 11 corridors seeing increases in availability ranging from 6 to 67%.
NYC Building Sold:
Market remains quiet as sellers have not yet adjusted sales prices to the buyers expectations due to lower expected rents and higher vacancy.
Manhattan Office:
Record Manhattan office vacancies, as existing office tenants either allow leases to expire or sublease their office space. New office construction continues and some hotels are being converted to office space.
Manhattan Retail:
Retail rents continue to fall as foot traffic in Manhattan’s most visited business districts has dropped off since the pandemic began, putting a strain on small businesses and retailers. The number of inactive storefronts has only increased, with more vacancies pending due to the eviction moratorium. Expect retail rents to continue to fall.
Manhattan Building Sales:
Sales of commercial properties are down 49% for the year. It has led to a crippling decline in revenue for New York City, which depends on real estate taxes to keep the lights on. Revenue was down 42% for the first 11 months of the year compared with the same period last year.
Office:
Manhattan Office rental prices are declining, as sublease space and new construction flood the market with more than 53 Million square feet of available office space. Availability is over 11% which means it is a Tenant Market.
Retail:
Manhattan retail prices continue to decline due to leases not being renewed and subleases flooding the market. Retail prices are unlikely to get better until the Covid vaccine and tourism rebounds.
Building Sales:
The building sales market is very quiet with the exception of a large long-term leased office building occupied by Amazon at 410 10th Avenue which sold for $952.5 million.
Office:
Manhattan office leasing is in the slowest leasing period within the past 20 years.
Retail:
Continued covid restrictions are causing increased retail distress among remaining retailers.
Building Sales:
Building sales remain slow. SL Green recently announced an agreement to sell 440 Tenth Avenue for $952.5 Million which is a good omen for the New York office sales market.
Manhattan Office:
Manhattan landlords are not letting viable tenants leave the table by offering increased free rent, more work allowance and better pricing. This trend will continue as more sublease space comes on the market.
Manhattan Retail:
National, regional and local stores continue to close due to Covid. More store closings are expected once the courts allow evictions for non paying commercial tenants in New York City. Even more restaurants are expected to close, as outdoor dining and 25% indoor capacity will only guarantee losses once the weather cools or rains.
Building Sales:
Covid has affected both building sale prices and sale volumes. Hotels and retail are expected to price 25% below pre covid prices. Office building values are lower by 10-20% depending on tenant lease term, rent and tenant credit.
Manhattan Office:
Manhattan office leasing was 2.39 million square feet last July , 1/2 of the leasing volume from July a last year ago. Additional sublease space is expected to be added to the market in the next few months...
Manhattan Retail:
Covid continues to decimate retail and restaurants as more national chains declare bankruptcy. Retail evictions were delayed another 30 days. Expect to see more retail vacancies once evictions are permitted..
Building Sales:
The number of sales has picked up as buyers anticipate the end of Covid and are able to buy now at depressed prices. Recent sales included 522 Fifth Avenue…
Manhattan Office:
Manhattan Office leasing was the slowest quarter since 2009.
Manhattan Retail:
Retail bankruptcy and retail closings flooded the Manhattan market.
Building Sales:
New York’s first-half investment sales volume declined 45 % to $9.65 billion. Manhattan had a 41% decline with just $5.6 billion in the first half of 2020.
Manhattan Office:
June had only 410,000 RSF of office leases signed in Manhattan.
Office leasing for the current quarter was the slowest since 2009....
Manhattan Retail:
The retail apocalypse continues with more chains announcing store closings. When the eviction moratorium lifts, expect to see vacancy. Target signed 2 Manhattan leases.
Building Sales:
The second quarter saw just 55 deals totalling $4.3 billion, down from 237 deals totalling $14.6 billion a year prior.
Manhattan Office:
Virtually no activity in office leasing, while new construction keeps getting built. The big questions are will companies diversify their offices outside of New York City and will companies need as much space as workers work remotely?
Retail:
Brick and mortar retail will not fully recover as it exists today. Months of unpaid rent during Covid and months more or partially being open will likely cause many existing brick and mortar retailers and restaurants to declare bankruptcy.
Building Sales:
All sales are on hold during Covid. Sellers are hoping for prices pre- covid and buyers are expecting a 20-30% discount, due to the uncertainty of rent collection of existing tenants, rental rates for new tenants and lease up period until full occupancy.
Office leasing in Manhattan virtually stopped when the outbreak in New Rochelle came to light. Many companies are waiting to see for some direction or date as to when businesses will reopen.
Retail:
Retail is off life support. None essential businesses were ordered to close. Only restaurants and quick serve are allowed to take out. Most restaurants cannot survive on this. Many chain and small retailers announced layoffs or many retailers will never return.
Building Sales:
A number of pending sales failed to happen when they could not get financing. Many others have put sales on hold until buyers can look at properties. Some industry experts say prices could fall 25% or more once Covid-19 abates
Manhattan Office:
Covid-19 will have a negative affect on Manhattan office leasing velocity. Office leasing plans will likely be on hold until the duration and severity of the coronavirus are revealed. Working from home and alternate work sites may push long-term office demand down, as more employees work remotely.
Manhattan Retail
The coronavirus will push down retail sales in physical stores and push even more sales on line. Gyms and restaurants recently saw activity in leasing, but will likely stop as people stay away from gyms and restaurants and other crowded locations.
Office:
Manhattan office leasing remains at an all time high, led by technology firms. There were 145 leases with rents starting at over $100/RSF.
Retail:
Manhattan retail leasing was off 9% from the previous month. With additional announcements of store closures, there will be increased pressure for Landlords to lower asking prices.
Building Sales:
Buildings sales volume dropped as residential rental sales were reduced by 2/3rds by the new law limiting rent increases. Now, an additional law was passed that residential landlords will now have to pay the brokerage fee.
