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?”
Very quickly after my affirmative response came his follow-up inquiring what happened to them. This required more than a monosyllabic response, even for a 9-year-old. Working in real estate, I was able to impress him with my extensive knowledge of how the Freedom Tower will have 2.9 million square feet of office space and be 1,776 feet tall, as he gazed up at its massive structure. As I continued on about office construction and the potential for 12.1 million square feet between now and 2017 throughout Manhattan, I lost him back to his game of Minecraft.
The Freedom Tower and Tower 4 are expected to be completed over the next 12 months, adding 5.9 million square feet to the Downtown inventory. Even with 42 percent of that space pre-leased, availability will still be significantly affected by the addition of 3.4 million square feet—and that in a market that already has 13.6 percent availability.
The reports of media, entertainment and information services companies interested in the big blocks of space at Brookfield Place, like the recently announced 75,000-square-foot lease by GfK at 200 Liberty Street, will go a long way toward setting up Downtown to be able to absorb the new space coming online. Otherwise, Downtown will be facing an availability rate north of 16 percent, and that is without counting the 2.4 million square feet being constructed at Tower 3, scheduled for a late 2015 delivery.
So if you were keeping track, 8.3 million square feet of today’s construction is located Downtown, the rest is scattered throughout Midtown and Midtown South, and if one was to look out farther and examine the Hudson Yards, there is another 19 million square feet in the development pipeline—but that is a topic for another column.
Richard Persichetti is the vice president of research, marketing and consulting at Cassidy Turley, with 14 years of NYC research experience.