The Manhattan office market has performed well since the end of 2011, but which submarkets are super-hot since then?
Out of the 17 submarkets tracked by Cassidy Turley, only four of them have benefitted from both a 200-basis-point or higher decrease in availability and greater than a $10.00-per-square-foot increase in average combined Class A/B asking rents. The heat is in the west, as all four super-hot submarkets are located on the west side of Manhattan.
With a 760-basis-point drop to 7.6 percent, Hudson Square/Tribeca had the highest availability dropout of all 17 submarkets. This submarket also had the largest increase in Class A/B asking rents out of the four super-hot submarkets—rising $16.61 per square foot to $62.76—making Hudson Square/Tribeca the hottest submarket.
The three other super-hot submarkets include Times Square, Penn Plaza/Hudson Yards and the Fashion District. Times Square heats up Midtown with the lowest availability rate of 6.6 percent, down 390 basis points since 2011, and a $10.51-per-square-foot Class A/B asking rental increase to $77.39.
Penn Plaza/Hudson Yards continues to make it into all of my top rankings with a 240-basis-point drop in availability to 12.6 percent and a $14.72-per-square-foot Class A/B asking rental increase to $54.39.
Classifying these four submarkets as “super-hot” is not to say the other 13 aren’t hot, as nine of the remaining submarkets had greater than a $10.00-per-square-foot increase in average Class A/B asking rents. Flatiron/Union Square and Chelsea/Meatpacking actually had the highest asking rental increases of $23.68 and $20.97 per square foot, respectively, but both of these submarkets had an uptick in availability during that same time frame.