As Macy’s is preparing to kick off the 87th Thanksgiving Day Parade, we look to another Thanksgiving institution, the American Farm Bureau Federation (AFBF) in this week’s column.
The AFBF has been conducting an informal price survey of the cost of a classic Thanksgiving dinner since 1986. According to the AFBF, the average cost of a traditional Thanksgiving meal is down this year $0.44 to $49.04. The biggest contributor to the drop in the meal price was higher turkey production this year, which dropped the average price of the bird by $0.47 compared to 2012. Frankly, I spend more than that on all the items that go into my antipasto on Thanksgiving, so clearly my traditional Italian feast is on the high end of the spectrum. But what does this have to do with real estate?
Well, at $49.04, the cost of a traditional Thanksgiving dinner is actually $0.85 higher than the overall average asking rent for office space in lower Manhattan today. Over the past five years, a Thanksgiving dinner has been more expensive than Downtown asking rents by an average of almost $5. In fact, since 2000, the average cost of a Thanksgiving dinner has outpaced Downtown rents in eight of the past 14 years. Even with the slight dip this year, the price of a traditional turkey dinner is up 71 percent since 1986, compared to only 55 percent for Downtown asking rents.
Will these trends last? As for Downtown, expect asking rents to surpass $50.00 per square foot next month with the addition of 4 World Trade Center to the market statistics. The demand for space Downtown—107 tenants relocated to lower Manhattan over the last 22 months—coupled with the steep discount in pricing to Midtown and Midtown South will likely assist in rents rising into 2014. So my bold prediction for Thanksgiving 2014 is that Downtown asking rents will surpass the cost of a Thanksgiving dinner. Now let’s all enjoy the parade! Happy Thanksgiving.