In honor of this week’s Power 100 rankings of real estate professionals, I figured I would create the first annual Power 5 rankings of the top submarkets by year-to-date leasing activity. To make things even across all 17 submarkets, they are based on leases signed and renewed as a percentage of the submarket’s total inventory. So without further ado, here are the Power 5.
Stat of the Week
Currently there are 10.5 million square feet of available sublease space on the market throughout Manhattan. While that sounds like a large number, when put in context of the 50 million square feet on the market, it only accounts for 21 percent of the total available supply. Read More
Leasing activity in the first quarter of 2013 totaled 7.15 million square feet, a 30 percent increase from each of the last two quarters of 2012. However, peeling back the layers reveals that 46 percent of these lease transactions were renewals. Yes you read that correctly—almost half of the square footage leased in the first quarter was renewals. Seven out of the top 10 transactions were large tenants opting to remain in place; this is a big contributor to the trend. Read More
The Midtown South availability rate was stagnant in the first quarter of 2013 at 9 percent, but it still remains the lowest of the three Manhattan markets.
Of the five submarkets in Midtown South, three have experienced declines in availability this year. Meanwhile both the Flatiron/Union Square and Hudson Square/Tribeca submarkets had four large blocks of space 50,000 square feet or greater added to the market, which pushed availability higher in these areas. Read More
In March, Manhattan Class A direct average asking rents dropped $0.19 per square foot. It’s only a mere $0.19, but the bulk of the decline came due to an $0.85-per-square-foot drop in Midtown Class A average asking rents.
The decrease was the largest since 2010 for Midtown Class A space, and represented the second consecutive month of declines. The $0.98-per-square-foot decline over the past two months is indicative of the shift in demand for space throughout Manhattan. At 22,036,093 square feet, available Class A Midtown space surpassed 22 million square feet for the first time since—you guessed it—2010. Read More
Additional 5.9 Million Square Feet of Office Space Projected For Lower Manhattan Over Next 12 Months
Last week, as I drove past the World Trade Center site with my son, a question came from the back seat, “Dad, is that where the Twin Towers used to be?” Read More
Manhattan Class A space currently accounts for 62 percent of the available supply in a recovering market. Yes, you read that correctly—62 percent in a recovering market! Read More
Flash back to the year 2007: Manhattan real estate was red-hot, and asking rental rates were at all-time highs across all 19 submarkets tracked by Cassidy Turley.
But then the financial world collapsed, and real estate quickly followed. Instead of a long, drawn-out down cycle, the market showed resilience and began to bounce back in 2010. Since that time, though, only three out of the 19 submarkets’ current overall average asking rents have surpassed those historical highs from 2007, with nine of the submarkets still 10 to 25 percent off those numbers. Read More
If you were a New York Mets fan in 1986, like former Mayor Ed Koch was, the number 19 was a good thing.
That year, while rents were flat at an average of $40 per square foot despite 35 million square feet of new construction, the Mets acquired a left-handed pitcher who wore the number 19 and helped propel the team to a World Series Championship. Read More
The current difference between average Class B Midtown and Midtown South asking rents is $6.45 per square foot. If we polled brokers on which market’s asking rent was higher, nine out of 10 would probably choose Midtown.
And they would be wrong. Read More
There are currently 89* contiguous blocks of 100,000 square feet and greater on the market.
As with most things in the world today, there is a caveat—and this is where that asterisk comes into play. This total number of 89 includes eight available blocks of space in buildings that are under construction. Compare that with 2010, when 78* such spaces existed (including five blocks under construction), and it is clear that today large blocks continue to be an impediment on market recovery. Read More
A flight to value is occurring in the Manhattan office market as Class B office product remains in high demand.
At 10.6 percent, the current availability rate for Class B space is 170 basis points less than the Class A rate of 12.3 percent. This is the only real estate cycle in recent history in which Class B availability rates have been lower than those for Class A. This trend started in 2012 and has continued for the last 10 months. Read More
New York City office employment closed 2012 with 1,260,700 jobs, an addition of 108,500 jobs since employment bottomed out at the end of 2009.
Job growth in office-sector industries (financial services, professional services, information services and real estate) is a prime driver for office space leasing. Availability rates remain high, however, because tenants are not occupying the same amount of space that they used to. Read More
Mega deals rule the commercial real estate market and the trade papers, as everyone in the industry wants to know where the latest big block of space was leased and who will take down the next one.
The market saw its share of deals that were 100,000 square feet and more in 2012, just slightly off of 2011’s pace—53 versus 56, respectively. It is always great to read about the UBS-type 890,000-square-foot renewals and expansions and the Microsoft-like 204,000-square-foot deals, but based on the number of transactions, these household names account for merely 3 percent of the leasing activity in any given year. Read More
Every year for the past 116 years, the Real Estate Board of New York has hosted its annual banquet. This year, the 117th banquet will take place on 1-17, which either is a coincidence or the REBNY Board has a secret numerologist among its ranks.
As we are unable to look back at commercial real estate statistics from 1896 due to a non-functioning flux capacitor, a time-travel-less comparison over the past 17 years proves that 2012 was a typical year of ups and downs for the market. Read More