Newmark Grubb Knight Frank’s quarterly office statistics for the United States are now complete, making this a good time to see how Manhattan stacks up against the other 54 markets covered, and how the U.S. office market is performing as a whole. (Warning: The following information is statistics-heavy).
The first quarter of 2014 closed with the total vacancy rate for the U.S. markets at 14.7%, down from 15.5% one year earlier, with net absorption of 11.9 million square feet compared to 9.5 million square feet in the first quarter of 2013. Meanwhile, the total average asking rent climbed 5.5% from one year earlier, to $26.60/SF. There was also greater interest in building new product, as office space under construction jumped to 61.7 million square feet from 42.5 million square feet one year ago.
Comparing the markets’ performance (with the focus, of course, on Manhattan) reveals the following:
- Manhattan’s vacancy rate of 8.8% was the second lowest of the markets, with San Francisco coming in at 6.1% (keep in mind, San Francisco’s inventory is 19% the size of Manhattan’s). The country’s highest vacancy rate for the quarter belonged to Las Vegas, at 24.0%, eking out Detroit’s figure of 23.1%.
- Manhattan led all markets regarding net absorption in the first quarter, at 1.6 million square feet; Boston, Atlanta and Dallas were close behind. The suburban markets of Virginia and Maryland pushed greater Washington D.C. to the back of the pack at negative 1.2 million square feet (the District of Columbia, proper, was in positive territory).
- Manhattan wrapped up the quarter with the highest total average asking rent in the United States at $62.46/SF, with San Francisco closing in at $56.66/SF. Northwest Arkansas and Central Arkansas were the lowest-priced markets, at $11.12/SF and $13.16/SF, respectively, followed by energy-centric Oklahoma City at $15.01/SF.
- Manhattan was also the leader in office space under construction, with 8.1 million square feet thanks to the World Trade Center and Hudson Yards. Rounding out the top three were two energy markets, Houston at 7.0 million-square-feet and Dallas with 5.6 million-square-feet.
These are only a few of the office highlights from the first quarter. If you want to know more, just log onto the NGKF website for additional information on the national picture as well as numerous detailed local reports.