In 1994, the Manhattan office market was still trying to recover from a glut of available space after it was body-checked by 60 million square feet of speculative construction from 1982 to 1991. Today’s market is much healthier with a 10.1 percent availability rate compared to 16.0 percent in 1994, and speculative development is not as common.
Midtown is the savvy veteran in this face-off, keeping its stats more consistent from year to year than any other submarket. In 1994, Midtown’s availability was at 14.1 percent, and today it is only 380 basis points lower, at 10.3 percent. Midtown South and Downtown availabilities were both significantly higher back in 1994. Midtown South’s availability was 870 basis points higher, at 15.8 percent, compared to today’s 8.7 percent. Downtown availability was almost double today’s rate of 10.9 percent, as it was 20.2 percent back when Mark Messier wore the “C” on his Rangers jersey.
Midtown South scores a hat trick when it comes to asking rent comparisons. Of course, all three submarkets have higher rents today both on a nominal and inflation-adjusted basis, but Midtown South has the biggest increases in asking rents for all three classes of space compared to 1994. Midtown South Class A asking rents are $45.56 per square foot higher, while Class B and Class C are not far behind, with asking rents at $45.48 and $44.51 per square foot higher, respectively. From the 1994 highlight reel, we see that Downtown Class B asking rents were $22.71 per square foot and that they were higher than Midtown South’s $18.56. Fast forward to 2014: Midtown South Class B asking rents are now 59 percent higher than Downtown’s.
Regardless of what the 20-year comparison shows, here’s hoping for the same ending to the Stanley Cup Finals from 1994. Let’s Go, Rangers!