New York City office
and retail Market Research

September 2014

September 2014 New York Commercial Real Estate Market Report

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Manhattan vacancies continue to decline with over a 1,340,000 RSF of net absorption last month. Developers are revisiting mothballed office building development sites. Vornado is reconsidering their plans to renovate the Hotel Pennsylvania and is now looking for office tenants for a proposed 3 million square foot development there.

Manhattan retail remains active, as foreign retailers continue to take additional locations and urgent care units continue to expand their footprint in New York City retail.

New York Market Overview

  • Total Manhattan Class A Office vacancies decreased from 9.8 % vacant to 9.6 % vacant
  • Total New York City Office vacancy decreased from 8.4 % vacant to 8.2 % vacant

New York Commercial Real Estate Overview

On the Bowery there is fierce competition between investors and a shortage of inventory that have sent prices for new and redevelopment sites on the street soaring.

The New York City restaurant business is not for the faint. A number of acclaimed long-standing restaurants the 30-year-old Union Square Cafe, Mesa Grill and Wylie Difresne's wd~50 among them closed or announced plans to shut because of rent increases or to make way for more lucrative real estate developments.

While asking rents are up along Sixth Avenue, the demand may not be rising as fast.
The number of Midtown Manhattan buildings with contiguous office space vacancies has surpassed the peak of the 2009 recession. Thirty-five blocks of more than 150,000 square feet of contiguous Midtown space were on the market by June. Five years ago, there were 31 blocks in the neighborhood. Vacancies are expected to increase in 2015, as many office tenants are consolidating space.

The sales price per square foot for Manhattan office buildings has been rising over the past several years and rental rates have not been rising as quickly.

The Manhattan office market held steady in July 2014, as demand for Downtown space remained strong and Midtown benefitted from an uptick in the finance sector jobs.

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