Stat of the Week: $48.25 per square foot
With 53,064,463 square feet of commercial space, Downtown’s Financial submarket is the largest of the 17 submarkets tracked by DTZ. Despite accounting for 60 percent of the Downtown inventory, the Financial submarket always seems to take a back seat to the World Trade Center submarket—but not this week!
In 2014, the Financial submarket had a strong year, with more than 1.2 million square feet of positive absorption recorded and an availability-rate-drop of 240 basis points to 9.8 percent. Class A asking rents had a modest increase of 4.8 percent to $48.41 per square foot, while Class B asking rents skyrocketed 19.1 percent to $43.56 per square foot. Demand was strong throughout the year, with seven leases signed greater than 100,000 square feet.
The submarket hit a minor roadblock to start 2015, as more than 980,000 square feet hit the market at 28 Liberty Street, formerly known as 1 Chase Manhattan Plaza. This has pushed both availability and Class A asking rents up to 11.3 percent and $53.06 per square foot respectively.
Dividing this submarket up into the Financial “Waterfront” versus the Financial “West” (as you can see from the accompanying graphic) demonstrates a slightly different trend for the area. In spite of the large space added at 28 Liberty Street, the West section is outperforming the Waterfront section. Although up 30 basis points from one year ago to 10.6 percent (with an assist from the WeWork lease for 240,000 square feet at 85 Broad Street), the West availability rate is significantly lower than the Waterfront’s 12.5 percent. The West section is also putting up strong Class A asking rents at $57.57 per square foot.
With only 35.1 percent of the financial submarket’s inventory in the Waterfront section, the availability rate remains high due mostly to the 830,000 square feet available at 180 Maiden Lane. This is one area in Manhattan to keep an eye out for in 2015, as it is only one of two sections in the market where Class A asking rents average under $50 per square foot and at $48.26 per square foot, remain a true value play for tenants.