Nonprofit, Public Sectors See Uptick in Leasing Activity [Updated]
Lauren Elkies Schram March 7, 2014, 11:30 a.m.
The nonprofit and public sectors finished 2013 with a bang when it came to leasing in New York City.
The two sectors leased more than 5.7 million square feet in 2013, a 36 percent increase from 2012, and more than double the space leased in 2011, according to Cassidy Turley‘s 2013 nonprofit and public sectors leasing activity report released exclusively to Commercial Observer.
In the fourth quarter of 2013, the nonprofit and public sectors leased 2.4 million square feet, accounting for 40 percent of the year’s activity. This compares with the last three months of 2012 when the two sectors leased 400,000 square feet, accounting for only 9 percent of the activity for the year.
The number of leases signed by the two sectors grew as well, with 173 leases signed last year versus 114 in 2012, while the average lease size dropped to 33,010 square feet from 36,842 square feet.
“The average deal size in 2013 shrank by 10 percent compared to 2012 due to a combination of both fewer and smaller government leases plus an increase in the overall number of smaller nonprofit organizations locking in their leases in 2013,” said Robair Reichenstein, a managing director and principal at Cassidy Turley’s not-for-profit practice group. “This year was a much quieter year for the governmental leasing sector, which normally has the largest space requirements, as the largest single government lease signed was approximately half that of 2012.”
In the fourth quarter, the nonprofit and public sectors accounted for eight of the 14 leases signed that were greater than 100,000 square feet. In fourth-quarter 2012, there was only one such deal. And for all of 2012, there were 11.
Within the nonprofit and public sectors, education services was the busiest last year, taking more than 1.5 million square feet. The second most active area was the government sector with more than 600,000 square feet in leasing deals, followed by the health care sector which leased more than 500,000 square feet.
Update: This story was edited to include a comment from someone at Cassidy Turley.