Manhattan Vacancy vs. Availability by the Numbers
By Robert Sammons September 18, 2013 6:00 am
reprintsTracking true vacancy as well as total availability for Manhattan, as we do here in the Research Wonk Center at Newmark (NMRK) Grubb Knight Frank, I thought it would be interesting to take a look at a few statistics comparing the two—especially over what one might consider the last cycle (in this case, beginning of recession, end of recession and current).
In addition, I also wanted to examine the differences regarding how these variables affected direct and sublet space. Just a couple of quick definitions for you: True vacancy is just that—space that is not physically occupied; it allows for a great snapshot as of the current point in time. Total availability is all space that is being marketed, whether vacant or occupied, though it does not include space under construction; this is highly important as it points to any future economic impact on the market, real estate and otherwise. One other note: The following numbers have been rounded off to keep your brain from short-circuiting.
- As of the end of August, 62 percent of the total availability in Manhattan was vacant; that is, 54.7 million square feet available vs. 33.9 million square feet vacant. For our last cycle, the figure was similar at the start of the recession (December 2007) with 60 percent vacant to available, dropping to 52 percent vacant to available by the end of the recession (June 2009).
- Vacant to available figures are very close for Midtown and Midtown South, coming in at 66 percent and 64 percent, respectively.
- Downtown is the exception, with just 51 percent of the space available classified as vacant. This, however, is about to change as approximately 2.8 million square feet of availability at 200 Liberty Street, 225 Liberty Street and 250 Vesey Street will soon be classified as vacant (October), which should take the figure to a sharply higher 71 percent.
- During most of the past six or so years, “the cycle,” sublet vacancy to availability has held between 40 percent and 42 percent, which is pretty tight. The exception was the middle of the recession when it rose to the 50 percent range.
- Direct vacancy to availability has ebbed and flowed over the cycle, starting out at 64 percent vacant to available, falling to 57 percent by the end of the recession and then rising again to 67 percent.
Over the next few months, don’t be surprised if Manhattan sees a decrease in the percentage of vacant to available space, especially in Midtown, as there should be several blocks hitting the market with forward availability dates. Something else to watch for will be new buildings entering inventory. In this case, the five we count across Manhattan opening over the next few months will have both equal (and significant) amounts of vacancy and availability.
