The overall vacancy rate for metro New York City closed out 2012 at 12.2 percent, equal to the third-quarter 2012 figure.
But first, the bad news.
Fairfield County, despite some rather high-profile announcements last year, had the highest vacancy rate, with 20.8 percent, up 50 basis points during the quarter. Right behind it was Westchester County, which climbed back over the 20 percent figure during the quarter.
The increases in these two affluent markets were caused by smaller spaces added in a number of properties. The Hudson Waterfront saw a sharp increase in its vacancy rate because the entire 145,000 square feet at 800 Harbor Boulevard in Weehawken was made available (this property may be converted into a data center).
Now, the better news.
The outer boroughs improved toward the end of the year, though minimally. For Long Island, the news was almost all good, with the vacancy rate falling in both counties. Suffolk County, in fact, saw the completion (and full occupancy) of a 768,000-square-foot building at 88 South Service Road, also known as the (new) Canon USA headquarters. And finally, there was Manhattan, with its 10-basis-point improvement thanks to a drop in availability in Midtown and Downtown.
What will 2013 bring? Not to sound too simplistic, but: more of the same. With just a slapdash solution to the fiscal cliff appearing at the last minute, we still have a long way to go before our economic house is in order, and thus (office) job growth could be weak. Manhattan will continue to lead the way, with a number of major lease transactions waiting in the wings, though some major blocks of space will also hit the market. Thus, net absorption may struggle and, in turn, the vacancy rate may be little changed unless the economy strengthens significantly.
Robert Sammons, Cassidy Turley
Robert Sammons is New York Tri-State Head of Research for Newmark Grubb Knight Frank and has worked in the real estate industry, primarily in the research and appraisal fields, for over 20 years. Follow Robert via RSS. email@example.com