100 Million: Lower Manhattan’s New Surplus
Robert Sammons July 24, 2013, 6 a.m.
No, that’s not the number of people in Times Square right now—though it absolutely seems like it. (Trust me, I have to trudge through there twice a day.) And no, that wasn’t the temperature last week (though with the humidity, it felt like it). One hundred million is actually the square footage of office space Downtown Manhattan will have—102,048,274 square feet, to be exact—once the just-announced 3 World Trade Center opens, around the beginning of 2017.
Back in the mid-1990s, Downtown inventory (which Newmark Grubb Knight Frank classifies into three submarkets: City Hall/Insurance, Financial and World Trade) was a record 110,114,507 square feet. That number began to decline around 1996, due first to the conversion of numerous office buildings to residential use (made more popular by tax incentives for doing so) and then to the events of 9/11. The figure hit its recent low of 90,955,229 square feet in the first quarter of 2004, but has since increased as a result of to two completions—7 World Trade Center and 200 West Street. With the soon-to-be-completed 1 and 4 WTC towers, the market will grow to 99,186,872 square feet.
Now all this growth doesn’t come without an asterisk. And that asterisk is the amount of availability that could be added to the very compact Downtown market. The current availability rate, according to NGKF, stands at 16.1 percent. With the completions of 1 and 4 WTC, the figure could climb to 17.5 percent, which would be its highest since the 18.8 percent recorded in the third quarter of 1996. Though further on the horizon, if we add 3 WTC to the statistics, it brings the availability rate to 19.5 percent. (Arguably, with a completion date three years out, a lot of space could be absorbed between now and then).
True confessions time—I am a huge fan of Downtown. I began my New York career on Wall Street when one couldn’t even find a Starbucks (oh, the horror!) and have loved it ever since. It is increasingly mixed-use (with plenty of Starbucks now, thank you), with soon to be greatly improved transportation infrastructure. Yes, there are obstacles (competition and, perhaps, changing weather patterns). But if history is any indication, these obstacles will be dealt with handily, and Downtown will continue to grow in popularity.