New York Market Overview
- Total Manhattan Class A Office vacancies decreased from 8.7 % vacant to 8.6 % vacant
- Total New York City Office vacancy stayed at 7.4 % vacant
The Chelsea/Meatpacking area of Midtown South had the lowest availability of office space of any of Manhattan’s 19 submarkets. 6.9 % of space was vacant in the first quarter of 2013, a drop from 9 % in the previous quarter.
There are anumber of class A office buildings are for sale in Manhattan. This could be a sign of a real estate bubble. The total dollar volume of New York City commercial real estate sales increased to $8.6 billion from $5.8 billion year-over-year, a 46 percent increase and the best quarterly results since mid-2011.
There were few large leasing deals, especially in Midtown’s pricey Plaza District. This is the city’s most expensive, and accounts for nearly a quarter of Manhattan’s office inventory. The plaza district only had 12 % of the city’s largest deals in the first quarter of 2013, the median size there was 9,902 RSF.
Manhattan leasing activity was the same as in the first and fourth quarters of 2012, but continued to be below historical averages. Net absorptionin the same period was negative 777,831 RSF.
Roughly $2.55 billion worth of deals were completed in the 1st quarter of 2013 compared to about $14 billion in the fourth quarter of 2012. The rush to close deals last quarter was driven by a desire to avoid tax increases that kicked in at the start of this year.
New York City construction industry is on the upswing because of more government spending, post-Sandy repairs and an infusion of cash for the Metropolitan Transportation Authority. While the New York Building Congress initially predicted that the city’s capital spending would total $8.7 billion through next year, it now projects that figure to be closer to $9 billion. Sandy repairs also have created $2 billion to $3 billion in temporary construction work.
Property prices are reaching record highs as developers make wild bids to claim available land. A client lost out on a West 77th Street site when a competitor bid nearly 50 percent over the original price. There is a scarcity of good development land in Manhattan. Pricing has almost now doubled from the peak of 2007.