market research

November 2015

November 2015 NYC Commercial Real Estate Market Report

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Office
Manhattan Office space vacancies increased as new office construction progresses and office tenants are now considering Brooklyn offices desirable. Meanwhile, conversions and demolitions from office use to Condo and Hotel continue unabated.

Retail
Manhattan Retail leasing has been quiet as tenants balk at paying the new normal prices. More retail vacancies and longer vacant durations are causing Manhattan retail prices to drop. One can see this trend in Soho where a broker says reduced price 50% of last year’s rental rate.....

New York Market Overview

  • Total Manhattan Class A Office vacancies increased from 9.0 % vacant to 9.3 % vacant
  • Total New York City Office vacancy increased from 7.9 % vacant to 8.0 % vacant

More than 26 million square feet of office space was leased in the first three quarters of the year, above the 10-year average of 25.8 million square feet. Asking rents rose above $70 per square foot for the first time since 2008. Rent for Class A and B office space averaged $61.00 per square foot in the third quarter, a 2.7% increase from the second quarter. The quarter closed with 109,847 square feet of positive absorption.

Multifamily sales in New York City were $845 million in August, involving 82 buildings and 47 transactions, down from the 88 buildings and 60 deals in August 2014. Manhattan sales represented $331.2 million.

The Brooklyn Waterfront ranks sixth in the country's office market and is growing. From Williamsburg and Greenpoint to Sunset Park in South Brooklyn, Kings County has 48 million square feet of office space, buildings with office or light-manufacturing use including 190 properties. The Dumbo submarket led the borough in terms of average asking rents in the third quarter with $64.47 per square foot. On the other end, South Brooklyn averaged $19.55 per square foot.

Manhattan has 398 million square feet, with Downtown and Midtown South accounting for 88 million square feet and 74 million square feet. The borough also has another 5 million of office or light manufacturing under construction or renovation that is to hit the market through 2018, and another 3.6 million square feet planned or proposed.

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