As a pair of 26-foot steel beams were hoisted high above Manhattan on April 30, the crowd below spoke of resilience, hope and remembrance.
One World Trade Center had just hit a height of 1,271 feet, making it the city’s tallest building. Port Authority Executive Director Pat Foye said in a press conference that the building will “anchor Lower Manhattan and its rebirth for many generations to come.”
But tourists and tristate residents aren’t the only ones noticing the change in the city skyline. A number of commercial property owners are looking to the tower and other developments as a hopeful bellwether for the future, despite what most analysts still describe as a stagnant market.
The numbers speak for themselves. Real estate brokers leased 12.9 million square feet through July 31, 2012, a 28 percent drop from the 17.9 million square feet inked during the same period in 2011, according to a CBRE report. Vacancy sat at 7.5 percent, no change from a year earlier.
Even so, there’s a big thanks to be given to Midtown South, which has ridden the tech and media boom in the area to the lowest vacancy rate of all U.S. central business districts in the second quarter of 2012, according to CBRE. The vacancy rate in the area, which spans roughly from 34th Street to Canal Street, was 4.8 percent through July 31, compared with 6.9 percent at the same time last year. Leasing activity is hot too, with 3.27 million square feet leased so far in 2012, compared with 2.99 million square feet the previous year.
Needless to say, there’s a lot riding on the 2.6 million square feet expected to be unleashed onto the market when 1 WTC is opened in 2014 by The Durst Organization and the Port Authority of New York and New Jersey. Larry Silerstein’s 4 World Trade Center, with its 1 million square feet of space, and Edward Minskoff’s 51 Astor Place, with its 400,000 square feet, are just a few of the high-profile towers slated for ribbon-cuttings in the next few years, as more and more property owners are hoping their gamble on Downtown Manhattan pays off.
“Midtown South is a hot market for media and tech firms, with the lowest vacancy in the country, which will lead to spillover in other markets,” said Brookfield Office Properties Chief Executive Dennis Friedrich, who operates seven buildings with 12.8 million square feet downtown. “Given the pricing disparity that still exists between Midtown and Downtown, we believe that Downtown is likely to be the greatest beneficiary of this spillover effect.”