Number of Contiguous Blocks of 100,000 Square Feet Rises
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.
Despite a decrease in the available supply in January, availability dipped 20 basis points to 11.4 percent—leaving a surplus of space in Manhattan. In the first six weeks of 2013, six blocks of space greater than 100,000 square feet hit the market. Five of these new blocks were in Midtown, bringing its total to 50* (two of which are under construction), one (which is under construction) was added in Midtown South for a total of 15*, and thankfully there were no new ones Downtown, keeping its total at 24* (including five under construction).
Not surprisingly, five of the six new blocks are Class A Midtown properties, which will further hinder the Class A market. The lone Class B block, a 117,000-square-foot sublease from Credit Suisse at 315 Park Avenue South, is in the Madison Square/Park Avenue South submarket. The availability rate in this submarket is 1 percent below market equilibrium at 9 percent, and coupled with recent activity in the area, is likely to be in high demand.
The 81 blocks of existing available space total more than 18 million square feet, or 39 percent of the available supply. Throw in the eight blocks that are under construction, and you add another 5.7 million square feet of state-of-the-art Class A space onto the market—a market in which Class A space is softer than Class B space for the first time in recorded history.
Richard Persichetti is the vice president of research, marketing and consulting at Cassidy Turley, with 14 years of NYC research experience.