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October 2018

October 2018 » Market Analysis » Market Report

October 2018 New York Commercial Real Estate Market Report

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Manhattan Office

New construction and buildings being re-purposed from department stores and industrial to office use contributed to more available office space despite strong office demand. Total Manhattan Office Market vacancy increased from 36.46 million RSF to 37.14 million RSF. The biggest new use group is Flexible office space with a multitude of new providers and existing players expanding their footprint.

Manhattan Retail
Manhattan Retail continues to get worse. Not only are vacancy rates up but many of the leases signed are temporary, so the true vacancy figures are higher than stated. This will lead to pressure for landlords to lower retail rental prices.

New York Market Overview

  • Total Manhattan Class A Office vacancies increased from 11.3 % vacant to 11.5 % vacant
  • Total New York City Office vacancy increased from 7.9 % vacant to 8.0 % vacant

Manhattan Office:

Total Manhattan Office Market vacancy increased from 36.46 million RSF to 37.14 million RSF. There was 2.7 million square feet leased during the first 2 quarters.

The technology, advertising, media and information (TAMI) sector rented 36% of the space, finance, insurance and real estate (FIRE) sector, with 18% and Flexible office space 7% .

The downtown manhattan office leased 1.9 million square feet leased in 2018’s second quarter. Availability rate downtown was 14.2% up from 11.3% in early 2017. 3 WTC is 38% leased.

Total Manhattan Class A Office vacancies increased from 11.3 % vacant to 11.5 % vacant

Manhattan Retail:

Retail is getting worse. A recent survey of Manhattan found that 20% of storefronts were vacant, compared with 7% vacancy in 2016 results. There were 188 empty stores along Broadway that were vacant.

There were 13 short-term retail leases in Manhattan in 2016 but by 2017 that figure had more than quadrupled to 53 deals. And 2018 is keeping pace with last year, with 28 short-term deals signed through the second quarter. Times Square retail has remained resilient. Vacancy rates fell to 15.6% in the second quarter from 22% in 2016.

The area along 34th Street between Fifth and Seventh avenues had a retail availability rate of 32.8%, the highest rate among the 11 different districts in Manhattan. Retail asking rents had declined by 12.3% from a year earlier to $635 per square foot.
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