Strong market fundamentals have led to three quarters of positive absorption this year in Manhattan, totaling 5.8 million square feet.
All three markets contributed to this positive total, as downtown led the way with 2.9 million square feet, which was fueled by 11 leases each signed for over 100,000 square feet. After recording negative 871,775 square feet of absorption in January 2014, Midtown roared back over the following eight months and brought the year-to-date absorption total to positive 2.3 million square feet. Midtown South posted 575,420 square feet of positive absorption this year, and is on pace to record its fourth consecutive year of positive absorption.
With all these absorption numbers in the black, which submarkets are contributing the most to these numbers? This year, 11 out of our 17 Manhattan submarkets have posted positive absorption. To make the comparison equal, let’s list the top five submarkets’ absorption as a percentage of each submarket’s overall inventory.
No. 5 – The lone Midtown South submarket, Soho/Noho/Village, had positive absorption that accounted for 2.6 percent of its inventory. This number would be higher if it was not the tightest submarket in Manhattan with less than 400,000 square feet available.
No. 4 – Grand Central is the first of three Midtown submarkets to make the list, and with 1.35 million square feet of positive absorption, it accounts for 2.7 percent of the submarket’s inventory.
No. 3 – Sixth Avenue/Rock Center leads all Midtown submarkets in total positive absorption this year with 1.44 million square feet, which accounts for 3.2 percent of the submarket’s inventory. It is also the only submarket in Manhattan to record positive absorption for 18 consecutive months.
No. 2 – Rounding out the three Midtown submarkets is Penn Plaza/Hudson Yards, which posted 651,252 square feet of positive absorption. As this submarket is one-fourth the size of the other two Midtown submarkets to make this list, positive absorption accounted for 4.5 percent of the inventory.
No. 1 – The World Trade Center tops this list and is the only submarket to represent downtown in the top five. With 1.62 million square feet of positive absorption this year, World Trade Center leads all submarkets in total volume of absorption and the highest percentage of the inventory absorbed at 5.5 percent.
