With the official first day of summer arriving this Saturday, let’s take a look at the hottest submarkets over the past 12 months based on a decrease in availability and an increase in overall average asking rents. Examining the top five submarkets for both statistics surprisingly produces only one Midtown South submarket and just one submarket in the top five for both categories.
First up are the submarkets with the five largest declines in availability. Not surprisingly, downtown submarkets claim the top two spots, as overall downtown availability dropped 370 basis points in the last 12 months. The World Trade Center submarket comes in at No. 1, as significant leases signed in the last 12 months sent the availability rate down 460 basis points to 12.2 percent. The Financial District submarket is not far behind, with a 360-basis-point drop to 10.3 percent. Midtown submarkets round out the top five, with the Penn Plaza/Hudson Yards submarket at No. 3, having recorded a 330-basis-point decline to 10.6 percent. Coming in closely behind that at No. 4 is the Sixth Avenue/Rock Center submarket with a 320-basis-point decrease to 10.2 percent. Despite having the second-highest availability rate in Manhattan, the Grand Central submarket ranks No. 5, with an availability rate of 12.5 percent, 250 basis points lower than 12 months ago.
Now let’s take a look at the five submarkets with the largest increases in asking rents over the past 12 months. In Soho/Noho/Village, the tightest submarket, asking rents skyrocketed by $20.74 per square foot to $76.18. The smallest of the 17 submarkets, City Hall/Financial, had the second-largest increase in asking rents, up $7.05 per square foot to $42.51. Midtown’s Fifth/Madison submarket slides in at No. 3, as the submarket with the highest overall asking rents saw them increase $6.58 to $105.11 per square foot. The only submarket to make both lists, World Trade Center, posted a $6.25-per-square-foot rise to $61.57. Rounding out the top five is Midtown West/Columbus Circle, which, despite an increase in availability, recorded a $5.65-per-square-foot increase to $69.61.
Making the list twice qualifies the World Trade Center as the hottest submarket heading into the summer.